Roadway Package System, Inc.

National Labor Relations Board - Board Decisions

Aug 27, 1998

326 N.L.R.B. 842 (N.L.R.B. 1998)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 842
Roadway Package System, Inc., a wholly owned sub-
sidiary of Roadway Services, Inc. and Wholesale
and Retail Food, Distribution, Teamsters Local
63, International Brotherhood of Teamsters,
AFL–CIO, Petitioner. Cases 31–RC–7267 and
31–RC–7277
August 27, 1998
DECISION ON REVIEW AND DIRECTION
OF ELECTION
BY CHAIRMAN GOULD AND MEMBERS FOX, LIEBMAN,
AND BRAME
On March 9, 1995, the Regional Director for Region
31 issued a Decision and Direction of Election in Case
31–RC–7267 (pertinent portions of which are attached as
an appendix) in which he found that the pickup and de-
livery drivers, “Temp A” drivers, and “contractor em-
ployees” at Roadway’s Ontario, California terminal are
employees within the meaning of Section 2(3) of the Act.
Thereafter, in accordance with Section 102.67 of the
Board’s Rules and Regulations, the Employer (Roadway)
filed a timely request for review of the decision, contend-
ing that the pickup and delivery drivers are independent
contractors.1 On April 11, 1995, the Board granted the
request for review. In Case 31–RC–7277, a petition
seeking a unit of all the pickup and delivery drivers at
Roadway’s Pomona, California terminal was filed under
Section 9(c) of the Act. Following the hearing held on
various dates between March 28 and April 25, 1995, this
case was transferred to the Board for decision on May
17, 1995, pursuant to Section 102.67(h) of the Board’s
Rules.2 Thereafter, the parties filed posthearing briefs.
As the Ontario and Pomona cases raise common ques-
tions of law and fact concerning the status of Roadway’s
pickup and delivery drivers,3 the Board has decided to
consolidate them for consideration and decision on re-
view.4
On December 3, 1996, the Board held oral argument in
these cases together with Dial-A-Mattress Operating
Corp., 326 NLRB No. 75 (1998), also issued today. At
the oral argument, the Board heard comments regarding
the following: (1) the Board’s authority to change or
modify the common law right-of-control test to deter-
mine if an individual is an employee under Section 2(3)
of the Act; (2) the relative importance of factors indica-
tive of employee or independent contractor status; (3) the
applicability of three specific cases,5 and (4) evidence of
financial gains or losses by the drivers in the Roadway
cases. The parties, as well as a number of amici curiae,6
participated in the oral argument and/or filed preargu-
ment and postargument briefs.7

1 Review of the Regional Director’s findings of employee status for
the Ontario Temp A drivers and contractor employees was not re-
quested.
2 By stipulation of the parties, substantial portions of the record in
the Ontario case were included in the Pomona case record.
3 At times, Roadway refers to the drivers at issue in these cases as
“P&D contractors” or simply “contractors.” To avoid any possible
confusion with the term “independent contractors,” we will refer to the
pickup and delivery drivers as “drivers” in our decision unless other-
wise noted.
4 In its postoral argument brief, Roadway renews its prior motion re-
questing that the Board consolidate additional pending cases involving
the same parties and identical issues in Cases 21–RC–19485 and 5–
RC–14313, or, in the alternative, take administrative notice of the re-
cords therein. The Board denied that prior motion on November 5,
1996. We find that Roadway has not raised any new or different argu-
ments to warrant our reconsideration of the November 5 denial.
After careful consideration of the entire record in each
case, the oral argument, and the briefs of the parties and
amici, we find that the Ontario and Pomona drivers are
employees within Section 2(3) of the Act. We, thus,
affirm the Regional Director’s findings and direction of
election in the Ontario case, and we direct an election in
the petitioned-for unit in the Pomona case.8

ases.
5 Roadway Package System, 288 NLRB 196 (1988); NLRB v. Am-
ber Delivery Service, 651 F.2d 57 (1st Cir. 1981), enfg. 250 NLRB 63
(1980); and C.C. Eastern v. NLRB, 60 F.3d 855 (D.C. Cir. 1995), enf.
denied and vacating 313 NLRB 632 (1994).
6 American Federation of Labor and Congress of Industrial Organi-
zations (AFL–CIO); American Trucking Associations; Associated
Builders and Contractors, Inc.; Chamber of Commerce of the United
States of America; Council on Labor Law Equality; Messenger Courier
Association of the Americas; and Newspaper Association of Americas.
7 On January 20, 1998, Roadway moved for reargument of these
cases. The Petitioner and amicus AFL–CIO filed opposition statements
to the motion, while amicus Chamber of Commerce filed a memoran-
dum in support of the motion. The motion is denied as the record,
briefs, and December 3 oral argument adequately present the issues and
positions of the parties and amici.
8 Member Hurtgen recused himself and took no part in the
consideration of these c
Because the Pomona petition was transferred to the Board for deci-
sion, we have reviewed the hearing officer’s rulings made at the
Pomona hearing. We find that these rulings are free from prejudicial
error and are affirmed. Based on the parties’ stipulation, we find that
Roadway is engaged in commerce within the meaning of the Act. We
also find that it will effectuate the purposes of the Act to assert jurisdic-
tion over Roadway. We further find, based on the parties’ stipulation,
that the Petitioner is a labor organization within the meaning of Sec.
2(5) of the Act and that it claims to represent certain employees of
Roadway. As discussed more fully below, we find that a question
affecting commerce exists concerning the representation of certain
employees of Roadway at its Pomona terminal within the meaning of
Sec. 9(c)(1) and Sec. 2(6) and (7) of the Act.
In addition, we shall permit the two temp A drivers and drivers
Jaime Calderon and Roberto Gonzales, who allegedly supervise non-
unit employees, to vote under challenge in the Pomona election because
there is insufficient evidence to determine their unit placement. The
Petitioner would exclude all four individuals from the Pomona unit,
whereas Roadway would include them. Yet, in the Ontario case, the
parties took different positions regarding the unit placement of similar
drivers. We further note that the parties’ posthearing briefs in the
Pomona case provide us with no clear explanation for these differences
in positions.
The parties agreed to exclude David Martinez and Juan Orozko, the
drivers of Calderon’s and Gonzales’ vehicles, respectively, on commu-
nity of interest grounds. We, therefore, exclude Martinez and Orozko
from the Pomona unit.
326 NLRB No. 72
ROADWAY PACKAGE SYSTEM, INC. 843
I. INTRODUCTION
Roadway, a Delaware corporation, operates a nation-
wide pickup and delivery system for small packages
throughout the United States. This system currently is
comprised of approximately 317 terminals and hub fa-
cilities. The sole issue to be decided here is whether the
drivers at Roadway’s Ontario and Pomona terminals are
employees under Section 2(3) of the Act or independent
contractors not subject to the Board’s jurisdiction.9

Almost a decade ago, the Board addressed a similar is-
sue for the pickup and delivery drivers at Roadway’s
terminals located at Louisville, Kentucky, and Redford,
Michigan. See Roadway Package System (Roadway I),
288 NLRB 196 (1988), and Roadway Package System
(Roadway II), 292 NLRB 376 (1989), enfd. 902 F.2d 34
(6th Cir. 1990). The Board found employee status for
the drivers in those cases. Specifically, in Roadway I,
288 NLRB at 198, the Board stated that the drivers “bear
few of the risks and enjoy little of the opportunities for
gain associated with an entrepreneurial enterprise” and
Roadway had “substantial control over the manner and
means” of performance by their drivers.
In Roadway I, Roadway controlled, inter alia, the cus-
tomer service areas and the number of packages and
stops that were assigned to the Louisville drivers. The
drivers had no proprietary interest in their customer ser-
vice areas, and their compensation was controlled by
Roadway. Roadway also maintained a “core zone sup-
plement rate” to balance the Louisville drivers’ income
across various zones and thus minimize their risk and
opportunity for gain. In addition, Roadway had a “flex”
program to allow for the temporary transfer of packages
or areas among the Louisville drivers to equalize their
workload. The drivers received no commission for any
customer sales leads, but they were eligible for a startup
loan of $650 in gross income per week for the first 13
weeks of delivery for Roadway. Most of the Louisville
drivers purchased or leased their vehicles from a source
sponsored by Roadway. On the termination of their ser-
vice to Roadway, the drivers were simultaneously re-
leased from their financial obligations to that source.
Finally, Roadway had significant control over the daily
work schedule of the Louisville drivers, and it required
that drivers wear a uniform and use the Roadway color
and logo on their vehicles.

9 For the first time in its postoral argument brief, Roadway untimely
argues that all the drivers are supervisors within the meaning of Sec.
2(11) of the Act. Roadway’s request for review in the Ontario case
included no argument that the Ontario drivers are supervisors. In fact,
Roadway’s stated ground for review there was that the Ontario drivers
are independent contractors. In its posthearing brief in the Pomona
case, Roadway also failed to raise any supervisory claim regarding the
Pomona drivers. The fact that the Regional Director excluded Ontario
driver Albin as a supervisor and no party requested review of that find-
ing does not cure Roadway’s untimeliness in raising a supervisory
claim regarding the Pomona drivers and the other Ontario drivers.
At oral argument in the instant cases, counsel for
Roadway argued that, commencing in 1994, Roadway
made nationwide changes in its driver operations. He
argued that those particular changes support a finding of
independent contractor status for the Ontario and
Pomona drivers. In this connection, counsel emphasized,
inter alia, that Roadway no longer: (1) requires a uniform
starting time; (2) maintains a fleet of vehicles for its
drivers’ use; (3) maintains forms for the drivers to lease
or purchase vehicles; (4) releases terminated drivers from
their financial obligations; (5) terminates drivers’ agree-
ments at will and without cause; and (6) assigns cus-
tomer service areas without giving the drivers a proprie-
tary interest in these areas.
As fully described below, we find that these 1994
changes do not require a different result from Roadway
I.10 Applying the common-law agency test as interpreted
by the Supreme Court in NLRB v. United Insurance Co.
of America, 390 U.S. 254 (1968), we have considered all
the incidents of Roadway’s relationship with its Ontario
and Pomona drivers, including the 1994 changes cited by
Roadway, and we find that the factors, as a whole, weigh
in favor of finding employee status for these drivers.
II. FACTS11
A. Duties and Responsibilities
Over 5000 drivers, including the Ontario and Pomona
drivers (approximately 22 each), are part of Roadway’s
nationwide distribution system. Six percent (or about
300 drivers) operate as incorporated businesses, but none
of the Ontario drivers do so. The drivers pick up and
deliver packages under an identical “Roadway Package
System, Inc. Pick-up and Delivery Contractor Operating
Agreement” (the 1994 Agreement). The 1994 Agree-
ment is a revision of an earlier contract used by Roadway
and its drivers prior to 1994. Shortly before the 1994
Agreement took effect in January 1994, the drivers were
told by Roadway that a failure to accept the new contract
would result in the nonrenewal of their working relation-
ship with Roadway. As a consequence, virtually all the
drivers have signed this new contract.
The 1994 Agreement runs from 1 to 5 years depending
on the duration date selected by the individual driver.
Under this contract, the drivers are required to deposit
with Roadway $1000 in an escrow account ostensibly to
10 The factual pattern presented in Roadway II closely resembled that
in Roadway I. The Board likewise found the drivers in Roadway II to
be statutory employees, concluding that “entrepreneurial decisions
affecting the drivers’ profit-and-loss picture are not made by the driv-
ers, and that the Respondent tells the drivers how to perform their work
tasks well beyond the point of simply dictating the result[.]” 292 NLRB
at 378.
11 Our recitation of the facts summarizes the records in both cases
and the information set forth at pp. 9 through 21 of the Regional Direc-
tor’s decision in the Ontario case (see appendix). Our factual findings
apply to both the Ontario and Pomona drivers unless otherwise indi-
cated.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 844
be applied to any indebtedness owing to Roadway on
contract termination.12 During its term, the 1994 Agree-
ment may be terminated by mutual agreement of the
driver and Roadway, by either the driver or Roadway
alone if the latter ceases to do business or reduces opera-
tions in all or part of the terminal service area, or by the
driver alone upon 30 days notice with a $1000 liquidated
damages payment. Roadway has terminated a few driv-
ers’ contracts for various reasons, including a driver’s
failure to pass a drug test, thefts, repeated accidents,
safety violations, or customer complaints. Under the
1994 Agreement, a driver may pursue arbitration of any
“wrongful termination” of his contract.13
Like the drivers in Roadway I and II, the Ontario and
Pomona drivers transport, pick up, and deliver packages
between their respective terminals and Roadway’s cus-
tomers. They provide daily service in a “primary service
area,” which is comprised of several postal “zip codes”
or other comparable geographic boundaries. The drivers
cannot refuse to accept merchandise for pickup and de-
livery in their primary service area. However, Roadway
can transfer any overflow work from one driver’s pri-
mary service area to other drivers to pick up and deliver
as part of Roadway’s “flex program.” The drivers may
select their own routes for making deliveries that are not
already pre-scheduled for any specified time. However,
the package pickups that are performed by the drivers
normally occur during the latter part of the day, and sev-
eral of the pickups may have specific time periods which
have been arranged by Roadway at the customer’s re-
quest. While on their routes, the drivers must use a
scanner to feed tracking data about their work into an
onboard computer that electronically transmits the in-
formation to Roadway’s central computer. On their re-
turn to the terminal at the end of the day, the drivers must
also transfer additional data from their equipment into
Roadway’s computer.
The Ontario and Pomona drivers average between 9
and 9-1/2 hours of work per day, Monday through Fri-
day. Their daily deliveries and pickups, like those per-
formed by the drivers at Roadway’s other terminals,
must interface with a “line haul” operation by which
Roadway transports overnight packages to and from its
terminals.14 This line-haul operation requires the drivers
to return to the terminals to have their vehicles unloaded
by Roadway’s package handlers, during the late after-
noon or evening hours, prior to the scheduled line haul
departures. The drivers have no particular starting time

12 Prior to 1994, the escrow deposit contractually required was only
$500. Under the 1994 Agreement, this amount continued to be the
requirement for those drivers who had worked for Roadway prior to
1994, because they were “grandfathered in.”
13 There is no contractual provision for arbitration of any other dis-
pute between the driver and Roadway. There is no evidence that
Roadway has a formal disciplinary system for its Ontario and Pomona
drivers.
14 The drivers do not operate the line-haul vehicles.
for work, but their vehicles must be present for loading
in the early morning hours after the terminal’s line-haul
interface process is done if they wish to have Roadway’s
package handlers load their vehicles with that particular
day’s deliveries. As Roadway points out, the drivers
now have the option of loading their vehicles themselves.
Most of the drivers, however, still choose to leave their
vehicles at the terminals overnight for the early morning
loading by Roadway’s package handlers.
As in Roadway I and II, the drivers must wear a
Roadway-approved uniform. The drivers wear either
shorts or long pants and short sleeve or long sleeve uni-
form shirts. The basic design for the uniform is a tan,
khaki-type shirt and a navy blue bottom. The uniform
displays Roadway’s RPS emblem and may have the
name of the driver if the latter so desires. The 1994
Agreement states that the driver must wear a uniform
“maintained in good condition” and consistent with stan-
dards “as promulgated from time to time by RPS.”
B. Vehicles
The Ontario and Pomona drivers own or lease vans to
perform their work for Roadway. Under the 1994
Agreement, the drivers may operate their vehicles for
other commercial or personal purposes when it is not in
the service of Roadway if they remove or mask all num-
bers, marks, logos, and insignia identifying Roadway.
There is no evidence that the drivers use their vehicles
for any commercial purpose other than hauling for
Roadway.15 The drivers’ vehicles must meet precise
specifications set by Roadway. A brochure entitled “Be-
coming a Roadway Package System Pick-up and Deliv-
ery Contractor” (new driver brochure) illustrates the
“RPS Package Vans” that are to be used by the drivers,
and indicates that the vehicles are “custom designed for
RPS.” The brochure describes the required make, model,
chassis, payload (weight and number of packages),
shelving, and rear door of vehicles.16 This document
further indicates that Roadway provides the drivers with
“warranty recovery assistance” and various “P&D Con-
tractor Assistance,” including a reference to “Assistance
in Arranging Financing of Vehicle Lease or Purchase.”
Nearly all the drivers obtain either new vehicles
through Bush Leasing or used vehicles from former driv-
ers of Roadway.17 During the “focus groups” conducted
by its recruiting department, Roadway advises prospec-
tive drivers that “we have a van that meets our specifica-
15 At the Pomona hearing, the parties stipulated that three drivers at
terminals other than Ontario and Pomona have used their vans for
commercial purposes on weekends.
16 The new driver brochure lists three sizes of package vans—P-400,
P-600, and P-1000—used for Roadway deliveries with payloads of
3200, 4500, and 10,000 pounds, respectively.
17 At the oral argument, counsel for Roadway conceded that while
some drivers obtain their vehicles elsewhere, “[t]here’s no question that
Bush Leasing provides the vehicles for most of the people.” There is
no evidence that Roadway has any financial interest in Bush Leasing.
ROADWAY PACKAGE SYSTEM, INC. 845
tions, it’s brand spanking new and you can buy it. You
can go to your credit union and buy it . . . and we have
recommended Bush Leasing.” In addition to recommen-
dations of this sort, Roadway makes sure that Bush Leas-
ing has a sufficient number of vans that are available to
the drivers. Based on its own estimates of how many
new drivers may need vans, Roadway purchases the vans
from the manufacturer, Navistar, Inc., which builds the
vehicles to Roadway’s specifications. Then, the Navistar
vehicles are re-sold to Bush Leasing for later acquisition
by the prospective drivers referred by Roadway. Nego-
tiations for the vehicles take place between the drivers
and Bush Leasing, without Roadway’s participation.
What proportion of the drivers purchase, rather than
lease, the Bush vehicles is not clearly indicated by the
record. The actual investment needed to purchase or
lease a vehicle is also not clear because no documenta-
tion for an actual purchase or lease was introduced into
the record. The estimated purchase price of these vehi-
cles ranges from $22,000 for the smallest-sized van to
$39,000 for the largest-sized van. William E. Breese,
Roadway’s director of contract relations, estimated that a
vehicle lease would require a $4000 down payment, and
payments between $300 to $400 monthly for 4 to 5 years
with a “balloon” payment at the end of the lease. But,
the new driver brochure suggests that vehicle financing
over a 5- to 6-year term is available with an $800 secu-
rity deposit, plus 1 month’s vehicle payment (amount
unspecified) and an $88 filing fee from the driver. In any
event, Breese further testified that there had been “many”
terminated drivers whose vans had been repossessed by
Bush for failure to make their monthly payments. Breese
revealed that he could not identify any of the drivers in-
volved in these repossessions or, for that matter, any spe-
cific example of a former driver actually incurring finan-
cial loss for this reason.
Regarding used vehicles, Breese testified at the On-
tario hearing that “normally” when a driver has no use
for a van, Roadway attempts to put the prospective
buyer/driver and seller/driver in touch with each other.
Ontario driver James Jeffries testified that “[t]here’s al-
ways been contractors [drivers] waiting to come on that
were more than happy to purchase the vehicles” from
other drivers.
Roadway assists in providing replacement vehicles to
the drivers whose vehicles are temporarily out of service.
It has negotiated a nationwide contract with national
commercial rental companies so that, according to
Breese, “good” rates and other favorable terms are pro-
vided to its drivers. Roadway has also purchased in ex-
cess of 200 vans per year from former drivers for the
current drivers to use as spare vehicles at terminals
around the country.
Under the 1994 Agreement, the drivers may operate
additional vehicles with Roadway’s consent and may use
additional “qualified persons” to operate the additional
vehicles, pursuant to applicable laws and Roadway’s
“safe driving standards” that are attached to the Agree-
ment. According to this Agreement, these extra drivers
shall “not be considered employees of RPS.” The drivers
are responsible for all expenses associated with using this
extra personnel. The drivers, without prior approval
from Roadway, may also use helpers or replacement
drivers on their routes. Ontario driver Albin and Pomona
drivers Calderon and Gonzales own or lease a second
vehicle and use additional drivers to service a second
primary service area assigned to each of them.18 Ap-
proximately 7 percent of Roadway’s drivers nationwide
have a second vehicle, but the record does not indicate
whether they have more than one primary service area
like Albin, Calderon, and Gonzales.
The 1994 Agreement also requires the drivers to be re-
sponsible for maintaining their own delivery vehicles19
and insuring that Roadway’s colors and logo are dis-
played on the vehicles “as part of the RPS system.” Be-
cause rental vehicles are not identifiable “as part of the
RPS system,” Roadway limits the use of such vehicles by
its drivers. Roadway’s vehicle appearance requirements
go beyond the minimal regulatory standards set forth by
the U.S. Department of Transportation.
C. “Business Support Package”
The “business support package” assists the drivers in
meeting their responsibilities under the 1994 Agreement.
For a daily $8 fee, the package includes a clean uniform
each day, the lease of the required scanner and computer,
an annual Department of Transportation (DOT) inspec-
tion, and a vehicle washing service. The package also
provides the drivers with the opportunity to purchase
from outside vendors, at “RPS-negotiated prices,” an
array of vehicular maintenance services and parts.20
The record shows that virtually all of Roadway’s 5000
drivers use the business support package. Breese testi-
fied that the number of drivers nationwide who do not
have the package is “very, very low, maybe less than
1%.” All the Ontario and Pomona drivers use the pack-
age, and, as confirmed by driver Roberto Gonzales, the
package is “convenient” and includes “things that would
be hard . . . to get on my own.”
D. Compensation and Financial Support
To use Roadway’s pickup and delivery services, the
customers must have an account with Roadway. Road-
way has customer sales representatives at each terminal,
and it maintains a toll free telephone number for cus-
tomer service and orders. Although Roadway argues that

18 As previously noted above in fns. 8 and 9, Albin is excluded from
the unit, and the status of Calderon and Gonzales has not yet been
resolved.
19 Roadway also posts charts on vehicles to remind the drivers about
necessary warranty maintenance.
20 These include preventive maintenance services, tires, batteries,
bumpers, package-handling equipment, body repairs, and paint.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 846
the drivers have a proprietary interest in their service
areas, the customer accounts are considered the exclusive
domain of Roadway. Drivers who refer new customers
to Roadway receive no commission for these referrals.
Roadway pays the drivers and they are responsible for
the withholding and the payment of their own Federal,
state, and local taxes. Roadway provides no paid holi-
days, vacations, disability, or retirement benefits to the
drivers. The record does not indicate a typical or an av-
erage annual income for the drivers.
Under the 1994 Agreement, Roadway provides the
drivers with eight distinct compensation mechanisms: (1)
a “van availability settlement” of $40 per day for “each
business day” that a driver provides services under the
agreement;21 (2) one rate for each package delivered and
picked up, and one rate for each stop;22 (3) a “temporary
core zone density settlement” to supplement the piece
rates based on a rate for a driver’s particular primary
service area which may contain one or more core zones;
(4) a voluntary “flex program” to compensate participat-
ing drivers $5 per day (in addition to the standard pack-
age pickup rates) for agreeing to pick up and deliver any
overflow work from fellow drivers; (5) a “quarterly per-
formance settlement” of 2.25 percent of the quarterly
gross settlement for drivers with at least 1 year of ser-
vice; (6) a “service bonus” of $500 per year for each of
the first 4 years a driver is under the agreement, and
$1000 per year after being under the agreement for 5
years or more; (7) a “customer service program” that
provides a bonus paid for no at-fault accidents and no
verified customer complaints based on driver and termi-
nal performance; and (8) a “service guarantee program”
under which the drivers are eligible for loans from
Roadway of up to $5000, depending on the amount
maintained in the driver’s “service guarantee account,”
which is an interest-bearing savings account to which
Roadway makes matching contributions of 20 percent
each quarter, or 80 percent annually.
Roadway furnishes other financial support to the driv-
ers. In the event of a substantial increase in the fuel
prices in a driver’s terminal area, the driver is entitled to
additional compensation from Roadway. Roadway also
makes available group rates for the insurance that the
driver is contractually obligated to obtain. The new
driver brochure describes Roadway’s 13-week “start-up
loan” program for drivers. Breese testified that loans
are “good” for 6 months. If a new driver’s settlement
does not reach a “certain” level, then Roadway “makes
up the difference” and the driver must pay back this loan
to Roadway, with interest, when the driver’s settlement

21 The drivers also receive up to a $100 for making their vehicles
available on business days before and after major holidays.
22 The 1994 Agreement also entitles the drivers to certain additional
compensation if the package is, inter alia, C.O.D., requires a “call tag,”
is a one-time as opposed to regular pickup, or weighs 100 or more
pounds.
reaches that certain level. Breese did not state the
amount of the loans or the size of the settlements in-
volved.
Roadway establishes all of the above elements of
compensation to the drivers as well as the service fees
charged to its customers. Based on the submitted weekly
driver settlement sheets, the largest proportion of a
driver’s income derives from the piece rates (deliver-
ies/stops and pickups), the daily van availability settle-
ment, and the temporary core zone density supplement.
According to the testimony of Ronald Long, Roadway’s
regional manager, the purpose of the temporary core
zone density settlement is to supplement a driver’s in-
come until such time as the package and stop density in
the driver’s area is within the “normal” range that is de-
rived for that area. The record does not show that a
driver’s participation in the “flex program” significantly
increases his weekly earnings. Whether to “flex” to a
participating driver, and the extent of that “flex,” is a
decision which is controlled by Roadway. Each driver’s
service area has a designated minimum and maximum
range of delivery stops that have been established by
Roadway with minimal input from the drivers. If the
delivery stops exceed the maximum level, they are
“flexed off” by Roadway to other drivers who are under
the maximum level of stops in their own service areas.
E. Proprietary Interest
Prior to 1994, Roadway’s practice was to assign the
service areas unilaterally to its drivers. When the drivers
signed the 1994 Agreement, they were granted a “pro-
prietary interest” in their existing service areas. Accord-
ing to Roadway, this proprietary interest is manifested in
the driver’s contractual right to sell his service area or
portions thereof, or to receive minimum compensation
for customer accounts that are reassigned or removed
from his service area.
According to Roadway, the concept of proprietary in-
terest and the contractual right to sell service areas afford
entrepreneurial opportunity for the drivers. As reflected
by the 1994 Agreement, the driver and Roadway have a
“mutual intention to reduce the geographic size of the
(driver’s) primary service area.” Under this plan, the
driver will sell off portions and reduce the geographic
size of his service area as business grows in his primary
service area if the driver cannot “reasonably service” all
or part of that area. In this way, the driver can use his
proprietary interest and his right to sell customer ac-
counts to maintain a serviceable area. The 1994 Agree-
ment proclaims this to be in the driver’s interest because,
purportedly, his income will rise and his expenses will
lessen in a smaller and more manageable, but more lucra-
tive, service area. In theory, the driver will also profit by
receiving compensation for the sale of these accounts.
How such sales are to occur is not clearly delineated in
the 1994 Agreement. On this subject, the agreement
ROADWAY PACKAGE SYSTEM, INC. 847
states that as the settlement and density of the driver’s
primary service area increase, the “potential value” of the
driver’s customers also “may” increase and the driver
may “sell to the highest bidder.” The agreement further
states that Roadway will not “interfere” with transactions
between the driver and other persons “who have the ca-
pability and qualifications to perform the services in this
Agreement.” According to the agreement, any transfer
and consideration paid “is strictly . . . between the Con-
tractor [driver] and any . . . Replacement Contractor
[driver],” but Roadway agrees to deduct any such con-
sideration from the purchasing driver’s weekly settle-
ment for up to 1 year and to remit it to the selling driver.
The agreement further states that Roadway shall have no
obligation to secure a replacement for a driver or to as-
sure payment for assignment.
Two other factors which are contained in the 1994
Agreement limit the scope of the driver’s proprietary
interest and right to sell. First, the drivers must be “in
good standing” before any interest in a service area can
be sold or transferred. Second, Roadway may reconfig-
ure a driver’s service area, on 5 days notice, “to take ac-
count of customer service requirements.” During the
notice period, the driver has the opportunity, “using
means satisfactory to RPS,” to restore service to the level
called for in the agreement. If the driver cannot provide
“reasonable means to continue to service the Primary
Service Area,” or he does not sell to another driver,
Roadway may reconfigure the driver’s area at its “sole
discretion.”
On the subject of reconfiguration, the record reveals
that some drivers who have participated in such sales
sold their service areas after Roadway’s management
warned that their areas would be involuntarily reconfig-
ured because of the driver’s inability to service certain
areas or accounts. Other drivers who have had their ar-
eas reconfigured engaged in such sales after having been
told that their overall contract would be “in jeopardy” if
the level of service in their areas did not improve.23
Driver Katts testified that he gave away a portion of his
area to maintain his overall standard of service and to
avoid endangering his entire contract with Roadway.
To avoid reconfiguration, a driver theoretically has
several alternatives which constitute “means satisfactory
to RPS.” According to Roadway, the drivers can hire
additional helpers or drivers, purchase or lease a second
vehicle, or obtain a supplemental vehicle (a trailer at-
tached to the vehicle). The record establishes that none
of the Ontario and Pomona drivers have used these op-
tions to avoid reconfiguration. A supplemental vehicle is
often too costly and does not result in additional com-
pensation because the drivers’ customer accounts have

23 The record shows that a contract “being in jeopardy” means to the
drivers that Roadway may resort to an involuntary reconfiguration of
their service areas or it may completely terminate their contracts.
not increased.24 For all practical purposes, the driver
who is faced with reconfiguration must either sell or give
away the affected area or he must submit to Roadway’s
involuntary reconfiguration.
If he cannot sell an area or Roadway takes over or re-
assigns his accounts, the driver is entitled to a minimum
form of compensation for the loss of customer accounts.
The 1994 Agreement provides that the driver has the
“right . . . to receive payment in the event his/her Primary
Service Area is reconfigured with the result that custom-
ers previously served by Contractor are reassigned.” The
driver to whom the accounts are transferred or Roadway
(if it takes over the accounts) must pay the driver who
relinquished the accounts specific dollar amounts based
on a formula described in the 1994 Agreement.
The evidence regarding the sales of service areas, or
portions thereof, is limited. At the Ontario hearing,
Roadway submitted documents attempting to show the
existence of such sales and whether the sales also in-
cluded the drivers’ vehicles. Roadway provided lists of
so-called “equity transfers” for approximately one-third
of Roadway’s total number of terminals for calendar year
1994. These lists were generated in response to Breese’s
electronic message (e-mail) which was sent to all of
Roadway’s terminals managers. Breese requested “any
information [the terminal managers] might have on trans-
fer of equity between drivers.” With a few exceptions,
most terminal managers who responded to Breese’s re-
quest listed no more than one or two transactions. Sev-
eral of these listed transactions indicated that a van was
included in the sale. Many of the listed transactions de-
scribed the dollar amounts involved as simply “un-
known.”
In several of these situations listed for Breese, the ter-
minal managers indicated that they had no first-hand
information about the sales, but had merely “heard of”
these sales. Pomona Manager Richard Jean testified that
he knew only “through rumors” about the seven transac-
tions that he had listed for Breese. Likewise, Ontario
Manager Rich Brager testified that he was aware that
drivers have sold stops and entire work areas, but he
could not provide the specific dollar amounts because he
was not involved in the transactions. In fact, Brager’s
reply to Breese’s e-mail inquiry gave no transactions for
Ontario at all. Ontario driver Pruitt testified that he took
over the route and van of driver Vanderslius as “a pack-
age thing” by making Vanderslius’ vehicle lease pay-
ments and promising to pay Vanderslius $3000 at the end
of the vehicle lease. In a written summary of the transac-
tions compiled from the various terminals, Breese ac-
24 As previously indicated, Ontario driver Albin and Pomona drivers
Calderon and Gonzales own or lease a second vehicle and use addi-
tional drivers, but the record shows that they did not take such action to
stave off reconfiguration. Rather, they wanted to service additional
primary service areas with distinctly separate routes and core zones. In
doing so, they receive additional compensation.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 848
knowledged that “there has been no attempt . . . to con-
firm either the details or the dollar amounts of transac-
tions.”
Regarding the Pomona transactions which were listed
by Manager Jean, none included the sale of a van. Ac-
cording to Jean’s testimony, he listed a transaction be-
tween drivers Vella and Steenburgen because he had
received an undated, signed agreement between Vella
and Steenburgen indicating a sale of a portion of the lat-
ter’s area for $1000.25 Drivers Gonzales, Irions, Hem-
sley, and Johnson participated in four of the listed trans-
actions and their testimony is summarized as follows. In
November 1994, Gonzales sold about 15 percent of his
route to Johnson, a new Pomona driver, for $1500, pay-
able $100 per week by personal check. Also, in Novem-
ber 1994, Irions sold a portion of his route to Johnson.
Irions received two checks of $1000 and $2800 directly
from Roadway for the sale. Irions believed that Road-
way lent Johnson the entire $3800 purchase price after
receiving his complaints about Johnson’s failure to pay
the agreed-upon amount. Irions was sure that Johnson
had borrowed the money from Roadway because it was
being deducted from Johnson’s check each week.26
Similar details for a third sale to Johnson from another
driver, Harkins, were not provided.27 Finally, Hemsley
purchased a portion of his route from driver Steenburgen
for $4000, and he paid $1000 “up front” to Steenburgen.
Hemsley agreed to pay the remaining amount due by
monthly check installments of $200.
III. CONTENTIONS OF THE PARTIES
The parties and the amici agree that under Section 2(3)
of the Act the Board must apply a multifactor test devel-
oped under the common law of agency to decide whether
an individual is an employee or an independent contrac-
tor. They uniformly argue that the Board has no author-
ity to apply a standard that departs from the common law
of agency principles, but they debate the relative impor-
tance of the factors to be applied under this multifactor
test. The Petitioner and amicus AFL–CIO contend that
the common law test should be broadly applied and that
“no single factor may be given primacy,” while Roadway
and other amici assert that the right to control the manner
and means of accomplishing the end result is the “most
important” factor or “predominant” consideration in de-
termining the individual’s status.28

25 Neither Vella nor Steenburgen testified, and Jean’s testimony did
not otherwise confirm this transaction.
26 A “contractor equity settlement deduction” form in the Ontario
case record states that Johnson authorized deductions of $25 weekly
from his settlement check until $1000 was reached for direct transfer to
Irions.
27 Harkins did not testify, and Johnson’s testimony does not elabo-
rate on this sale.
28 The parties and amici also disagree about whether controls man-
dated by Governmental regulations should be considered probative of
an employee-employer relationship. Unlike our concurring colleague,
we find it unnecessary to reach this issue because our disposition of the
Under its articulation of the common law test, Road-
way argues that the drivers are independent contractors.
In support of its argument, Roadway emphasizes, inter
alia, that the drivers control their own work schedules
and other details of job performance; they are not subject
to a disciplinary policy; and their compensation package
is based on performance-related components. Roadway
further asserts that the drivers are independent entrepre-
neurs because they have a significant proprietary interest
in their service areas and they have experienced gains
and losses in their businesses. Roadway notes that the
drivers, like independent businessmen, receive no fringe
benefits from it, and they are responsible for their own
tax withholdings.
Relying on the Board’s decision in Standard Oil Co.,
230 NLRB 967 (1976), the Petitioner takes the position
that the drivers are employees within the meaning of
Section 2(3) of the Act. In support of its view, the Peti-
tioner contends that the drivers have no genuine or sig-
nificant opportunity to realize financial gains or losses
through the exercise of entrepreneurial initiative. The
Petitioner asserts that Roadway controls the customer
rates and business volume, which are the main determi-
nants of the drivers’ revenue. It further asserts that the
drivers’ proprietary interest is not a true indicator of
ownership but more like a rental arrangement with a de-
posit, some of which is to be returned upon the termina-
tion of the driver’s services to Roadway. The Petitioner
also argues that the drivers’ alleged ability to expand the
volume of packages by growing Roadway’s business in
their service areas is largely illusory. According to the
Petitioner, the drivers have only a theoretical opportunity
to haul for others, and Roadway’s various support pro-
grams “cushion” the drivers’ risk of loss in servicing
Roadway’s customer accounts.
IV. LEGAL PRINCIPLES
Section 2(3) of the Act, as amended by the 1947 Labor
Management Relations Act (the Taft-Hartley Act), pro-
vides that the term “employee” shall not include “any
individual having the status of independent contractor.”29

case is not based on factors stemming from Governmental regulations
or control.
29 Sec. 2(3) [29 U.S.C. §152(3)] provides in full:
The term “employee” shall include any employee, and shall not
be limited to the employees of a particular employer, unless the
Act [this subchapter] explicitly states otherwise, and shall in-
clude any individual whose work has ceased as a consequence
of, or in connection with, any current labor dispute or because
of any unfair labor practice, and who has not obtained any
other regular and substantially equivalent employment, but
shall not include any individual employed as an agricultural la-
borer, or in the domestic service of any family or person at his
home, or any individual employed by his parent or spouse, or
any individual having the status of an independent contractor,
or any individual employed as a supervisor, or any individual
employed by an employer subject to the Railway Labor Act
[45 U.S.C. §151 et seq.] as amended from time to time, or by
any other person who is not an employer as herein defined.
ROADWAY PACKAGE SYSTEM, INC. 849
The meaning and ramifications of this 1947 amendment
were first considered by the Supreme Court in NLRB v.
United Insurance Co. of America, 390 U.S. 254 (1968).30
In that case, the Court declared that

[t]he obvious purpose of this amendment was to have
the Board and the courts apply general agency princi-
ples in distinguishing between employees and inde-
pendent contractors under the Act. [Footnote omitted.]
And both petitioners and respondents agree that the
proper standard here is the law of agency. Thus there is
no doubt that we should apply the common-law agency
test here in distinguishing an employee from an inde-
pendent contractor. [390 U.S. at 256.]

The Court, however, recognized that the application of
the common-law agency test may be challenging at times
because “[t]here are innumerable situations which arise
in the common law where it is difficult to say whether a
particular individual is an employee or an independent
contractor.” The Court further stated that there is no
“shorthand formula” or “magic phrase” associated with
the common-law test. Instead, the Court specifically
instructed that under the common-law agency test “all
the incidents of the relationship must be assessed and
weighed with no one factor being decisive. What is im-
portant is that the total factual context is assessed in light
of the pertinent common-law principles.” 390 U.S. at
258.
In United Insurance, the Court upheld the Board’s de-
termination of employee status for the debit agents of the
respondent insurance company. In doing so, the Court
emphasized the following “decisive factors” present in
that case:

[T]he agents do not operate their own independent
businesses, but perform functions that are an essential
part of the company’s normal operations; they need not
have any prior training or experience, but are trained by
company supervisory personnel; they do business in
the company’s name with considerable assistance and
guidance from the company and its managerial person-
nel and ordinarily sell only the company’s policies; the
“Agent’s Commission plan” that contains the terms and
conditions under which they operate is promulgated
and changed unilaterally by the company; the agents
account to the company for the funds they collect under
an elaborate and regular reporting procedure; the agents
receive the benefits of the company’s vacation plan and
group insurance and pension fund; and the agents have
a permanent working arrangement with the company
under which they may continue as long as their per-
formance is satisfactory. [390 U.S. at 259–260.]

30 This amendment was added in response to Congressional dis-
agreement with the standard applied by the Board to determine em-
ployee status in NLRB v. Hearst Publications, Inc., 322 U.S. 111
(1944).

For a long time, United Insurance has been the pre-
eminent guidance to the lower courts and the Board on
what standard should be applied in differentiating em-
ployee status from independent contractor status in the
NLRA context. Recent Supreme Court precedent rein-
forces United Insurance’s observations about the appro-
priateness of using the common law of agency as the test
for determining employee status. See NLRB v. Town &
Country Electric, 516 U.S. 85 (1995); Nationwide Mu-
tual Insurance Co. v. Darden, 503 U.S. 318 (1992); and
Community for Creative Non-Violence v. Reid, 490 U.S.
730 (1989). Furthermore, these cases teach us not only
that the common law of agency is the standard to meas-
ure employee status but also that we have no authority to
change it.
In Town & Country Electric, supra, the Court upheld
the Board’s position that paid union organizers are not
excluded from the term “employee” as defined in Section
2(3) of the Act. In reaching its unanimous holding, the
Court specifically observed that

[i]n the past, when Congress has used the term “em-
ployee” without defining it, we have concluded that
Congress intended to describe the conventional master-
servant relationship as understood by “common-law
agency doctrine.” Nationwide Mutual Insurance Co. v.
Darden, supra, at 322–323 (quoting Community for
Creative Non-Violence v. Reid, supra, at 739–740).

Both Darden and Reid address similar employee defi-
nition issues arising under the Employee Retirement In-
come Security Act of 1974 (ERISA), 29 U.S.C. §1001 et
seq., and the Copyright Act of 1976, 17 U.S.C. §101 et
seq., respectively.31 In each situation, the Court turned,
as it had previously done in United Insurance, to tradi-
tional common-law agency criteria to identify whether an
employer-employee relationship existed. In this connec-
tion, the Court in Reid, supra at 752 fn. 31, further high-
lighted the importance of the multifactor analysis of the
Restatement (Second) of Agency, Section 220 (dealing
with the definition of a servant).32
31 In Reid, an artist had been commissioned to produce a sculpture
by a Washington, D.C. nonprofit organization dedicated to eliminating
homelessness in America. The Court determined that the artist in ques-
tion was not an employee of the organization but an independent con-
tractor. In Darden, an insurance company had denied retirement bene-
fits to a former agent on the ground that he was an independent contrac-
tor. The Court rejected the insurance company’s defense to the extent
that it remanded the case for a determination of whether the agent
qualified as an employee under common-law agency criteria for identi-
fying master-servant relationships.
32 This section provides, in pertinent part:
(1) A servant is a person employed to perform services in the affairs
of another and who with respect to the physical conduct in the perform-
ance of the services is subject to the other’s control or right of control.
(2) In determining whether one acting for another is a servant or an
independent contractor, the following matters of fact, among others, are
considered:
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 850
The parties and amici in the instant case rely on the
Restatement, but they debate whether any of the factors
listed in Section 220 are more or less indicative of em-
ployee status. Citing the language contained in Subsec-
tions (1) and 2(a), Roadway and several amici argue that
the “most important” or “predominant” factor to be con-
sidered is whether an employer has a “right to control”
the manner and means of the work. In contrast, the Peti-
tioner and the AFL–CIO assert that all the factors should
be weighed in the equation, as evidenced by the opening
paragraph of Subsection 2 of Section 220.
The Supreme Court has clearly stated that “all of the
incidents of the relationship must be assessed and
weighed with no one factor being decisive.” See United
Insurance, 390 U.S. at 258; Reid, 490 U.S. at 752; and
Darden, 503 U.S. at 324. While we recognize that the
common-law agency test described by the Restatement
ultimately assesses the amount or degree of control exer-
cised by an employing entity over an individual, we find
insufficient basis for the proposition that those factors
which do not include the concept of “control” are insig-
nificant when compared to those that do. Section 220(2)
of the Restatement refers to 10 pertinent factors as
“among others,” thereby specifically permitting the con-
sideration of other relevant factors as well, depending on
the factual circumstances presented. In addition, Com-
ment c to Section 220(1) of the Restatement states that
“[t]he factors in Subsection (2) are all considered in de-
termining the question [of employee status], and it is for
the triers of fact to determine whether or not there is a
sufficient group of favorable factors to establish the em-
ployee relationship.” (Emphasis added.) Thus, the com-
mon-law agency test encompasses a careful examination
of all factors and not just those that involve a right of
control. See NLRB v. Amber Delivery Service, 651 F.2d
57, 61 (1st Cir. 1981) (“The determination of ‘independ-
ence’ . . . ultimately depends upon an assessment of ‘all
of the incidents of the relationship . . . with no one factor
being decisive.’ NLRB v. United Ins. Co., 390 U.S. at
258; . . . see also Restatement (Second) of Agency §220
(1958).”) As the Board stated in Austin Tupler Trucking,

(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 occupa-
tion or business.
(c) The kind of occupation, with reference to whether, in the locality,
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 workman 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.
(j) Whether the principal is or is not in the business.
261 NLRB 183, 184 (1982): “Not only is no one factor
decisive, but the same set of factors that was decisive in
one case may be unpersuasive when balanced against a
different set of opposing factors. And though the same
factor may be present in different cases, it may be enti-
tled to unequal weight in each because the factual back-
ground leads to an analysis that makes that factor more
meaningful in one case than in the other.”
In Standard Oil Co., 230 NLRB 967, 968 (1977), the
Board rejected any

so-called “right to control” test which mistakenly em-
phasizes minor details of the day-to-day performance
of the Company’s work by the commission drivers and
minimizes important aspects of the arrangement be-
tween the Company and drivers which, although not
too obviously encompassed by the “right to control”
language, have, nevertheless, always been regarded as
important factors in determining whether an employ-
ment relationship exists. It should be noted that, al-
though the Supreme Court acknowledged in N.L.R.B. v.
United Insurance Co. of America, 390 U.S. 254 (1968),
that amending legislation after N.L.R.B. v. Hearst Pub-
lications, Incorporated, 322 U.S. 111 (1944), requires
application of the common law agency test in determin-
ing who are employees under the National Labor Rela-
tions Act, it nowhere mentions the “right to control”
test, apparently preferring to rely on specific considera-
tions frequently mentioned with the “right to control”
test in determining whether an employment or an inde-
pendent contractor relationship exists.

The factors discussed by the Board in Standard Oil are con-
sistent with those relied on by the Court in United Insur-
ance, 390 U.S. at 259.
To summarize, in determining the distinction between
an employee and an independent contractor under Sec-
tion 2(3) of the Act, we shall apply the common-law
agency test and consider all the incidents of the individ-
ual’s relationship to the employing entity.
V. APPLICATION OF THE COMMON-LAW AGENCY TEST
Guided by the legal principles set forth above in Sec-
tion IV, we now apply the common-law agency test to
the present situation involving the Ontario and Pomona
drivers. We find that the dealings and arrangements be-
tween these drivers and Roadway, including those reflec-
tive of the changes made by the 1994 Agreement, have
many of the same characteristics of the employee-
employer relationship presented in United Insurance.
Reviewing the factors relied on by the Board in Roadway
I, we see insignificant change pointing to independent
contractor status.33
33 In response to the Chairman’s concurrence, we disagree that the
owner-operators in Dial-A-Mattress, like the drivers here, do not have
independent contractor status. Contrary to the Chairman, we find that
Roadway’s Ontario and Pomona drivers are distinguishable from Dial’s
ROADWAY PACKAGE SYSTEM, INC. 851
A. Analysis of Factors
As in United Insurance, the drivers here do not operate
independent businesses, but perform functions that are an
essential part of one company’s normal operations; they
need not have any prior training or experience, but re-
ceive training from the company; they do business in the
company’s name with assistance and guidance from it;
they do not ordinarily engage in outside business; they
constitute an integral part of the company’s business un-
der its substantial control; they have no substantial pro-
prietary interest beyond their investment in their trucks;
and they have no significant entrepreneurial opportunity
for gain or loss. All these factors weigh heavily in favor
of employee status, and are fully supported by the fol-
lowing facts.
The Ontario and Pomona drivers devote a substantial
amount of their time, labor, and equipment to performing
essential functions that allow Roadway to compete in the
small package delivery market. “[T]he functions per-
formed by the drivers . . . constitute a regular and essen-
tial part of the company’s business operations.” NLRB v.
Amber Delivery, supra, 651 F.2d at 63 (citing Restate-
ment (Second) of Agency, Section 220(h)). None of the
drivers are required to have prior delivery training or
experience. Those unfamiliar with Roadway’s system
can gain assistance and guidance from the new driver
orientation meetings that are conducted by Roadway’s
personnel. While a few operate as incorporated busi-
nesses, all the Ontario and Pomona drivers do business in
the name of Roadway. Wearing an “RPS-approved uni-
form,” the drivers operate uniformly marked vehicles. In
fact, the vehicles are custom designed by Roadway and
produced to its specifications by Navistar. The vehicles
are identical as to make, model, internal shelving, and
rear door, differing only as to chassis and payload (three
choices depending on the size of the driver’s primary
service area). All the vehicles clearly display Roadway’s
name, logo, and colors.34 Thus, the drivers’ connection
to and integration in Roadway’s operations is highly
visible and well publicized.
The drivers have a contractual right to use this custom-
ized truck in business activity outside their relationship
with Roadway,35 though none of the Ontario and Pomona
drivers (and only 3 out of Roadway’s 5000 drivers na-
tionwide) have used their vehicles for other commercial
purposes. This lack of pursuit of outside business activ-
ity appears to be less a reflection of entrepreneurial

owner-operators in several important respects. See our discussion in
today’s decision in Dial-A-Mattress Operating Corp., 326 NLRB No.
75.
34 See Amber Delivery Service, supra, 651 F.2d at 62, and C.C. East-
ern, supra, 60 F.3d at 858 (control exercised over the appearance of the
driver’s dress and vehicle suggests employee status).
35 The drivers have had permission to use their vehicles for personal
and other commercial purposes for many years. See Roadway I, supra,
288 NLRB at 197.
choice by the Ontario and Pomona drivers and more a
matter of the obstacles created by their relationship with
Roadway.36
Roadway’s drivers are prohibited under the 1994
Agreement from conducting outside business for other
companies throughout the day. The drivers’ commitment
to Roadway continues through the evening hours when
they must return their vehicles to the terminal to interface
with Roadway’s evening line-haul operations. Typically,
most drivers then take their vehicles out of circulation.
They leave their vehicles overnight at the terminal to take
advantage of loading of the next day’s assignments by
Roadway’s package handlers. As a consequence, their
vehicles remain out of service during these off-work
hours. Even if the drivers want to use their vehicles for
other purposes during their off-work hours, there are
several obvious built-in hindrances. First, the vehicles
are not readily available. Second, before the driver can
use his vehicle for other purposes, he must mask any
marking reflecting Roadway’s name or business. Every
vehicle utilized by the driver has been dictated in de-
tail—color, size, internal configuration including the
internal shelving and door—by Roadway’s operations.
The vehicles are also not easily flexible or susceptible to
modifications or adaptations to other types of use. Thus,
these constraints on the drivers’ use of their vehicles dur-
ing their off-work hours “provide minimal play for en-
trepreneurial initiative and minimize the extent to which
ownership of a truck gives its driver entrepreneurial in-
dependence.” Amber Delivery Service, supra at 63.
Roadway has simply shifted certain capital costs to the
drivers without providing them with the independence to
engage in entrepreneurial opportunities.
Truck ownership can suggest independent contractor
status where, for example, an entrepreneur with a truck
puts it to use in serving his or another business’ custom-
ers.37 But, the form of truck ownership, here, does not
eliminate the Ontario and Pomona drivers’ dependence
on Roadway in acquiring their vehicles. Roadway’s in-
direct control is further seen in that it requires the drivers
36 In C.C. Eastern, supra, 60 F.3d at 860, the court agreed with the
principle that “if a company offers its workers entrepreneurial opportu-
nities that they cannot realistically take, then that does not add any
weight to the Company’s claim that the workers are independent con-
tractors.” We view the Ontario and Pomona drivers’ contractual right
to engage in outside business as falling within the category of those
“entrepreneurial opportunities that they cannot realistically take.” For
all practical purposes, the Ontario and Pomona drivers abide by work
schedules that prevent them from taking on additional hauling business
during their off-hours during the workweek. None of them and less
than 1 percent of Roadway’s total fleet of drivers have ever used their
vehicles outside their relationship with Roadway. These small figures
are particularly telling since the drivers have been permitted to use their
vehicles for other commercial purposes for many years.
37 See Amber Delivery Service, supra at 61. But see, e.g., Adderly
Industries, 322 NLRB 1016, 1022–1023 (1997); R.W. Bozell Transfer,
304 NLRB 200, 201 (1991) (truck ownership unsupported by other
factors does not suggest independent contractor status).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 852
to acquire and maintain their own specialty vans, and
Roadway eases the drivers’ burden through its arrange-
ment and promotion of Navistar vans sold or leased
through Bush Leasing.38 Although it does not directly
participate in these van transfers, Roadway’s involve-
ment in these deals undoubtedly facilitates and ensures
that a fleet of vehicles, built and maintained according to
its specifications, is always readily available and recy-
clable among the drivers.
Roadway also encourages the sale of used vehicles
from former to new drivers. In this way, Roadway eases
the new driver’s responsibility for obtaining a qualified
vehicle. It further decreases the former driver’s risk of
repossession by Bush Leasing39 and increases the likeli-
hood that there will be a qualified buyer for a costly spe-
cialty van no longer needed by the former driver. There
is simply no ready market for these vehicles. Every fea-
ture, detail, and internal configuration has been dictated
by Roadway’s specifications. In short, Roadway has
created a system which makes the necessary, custom
vehicles readily available to prospective drivers, and en-
ables drivers who want to end their relationship with it to
easily transfer their vehicles to incoming drivers. By the
same token, the specialized vehicles required by Road-
way are of no further use to former drivers who naturally
sell the vehicles to incoming Roadway drivers when their
relationship with Roadway is over.
Roadway is also a ready source for replacement vans
when the drivers’ vehicles are unavailable because of
needed maintenance or repair. Roadway arranges for the
rental of vehicles from national rental companies and
negotiates rental prices favorable to its drivers. At most
terminals, Roadway also maintains spare vehicles pur-
chased from former drivers that can be used by current
drivers on a short-term basis when their vehicles break
down.
In addition to this vehicle assistance, the “business
support package” helps ensure that the drivers’ vehicles
are properly maintained and covered by specific warran-
ties. Roadway reminds the drivers that certain essential
maintenance is needed by placing charts on the windows
of the drivers’ vehicles. The brochure to prospective
drivers also advertises Roadway’s maintenance “assis-

38 The number of vehicles sold to Bush Leasing is based on Road-
way’s own internal estimates, inter alia, of how many new drivers
Roadway intends to add.
39 Roadway claims that the drivers, on termination of their services,
are no longer released from their financial obligations pertaining to
their vehicles. We find insufficient evidence in the record to support
this claim. Director Breese testified that Bush Leasing has repossessed
vans and has held terminated drivers accountable for outstanding loan
balances. However, he was unable to identify specific examples of the
use of such tactics by Bush Leasing. There was further no attempt to
have Bush Leasing corroborate Breese’s general testimony. In contrast,
driver Jeffries testified that, based on his observation and experience,
drivers are always available to purchase vehicles from former drivers.
Breese did not respond to this testimony, nor did he refute Jeffries’
implication that repossessions simply do not occur.
tance” and further notes that “RPS provides warranty
recovery assistance” to its drivers. The “business sup-
port package” also gives the drivers easy access to clean
work uniforms. This assistance by Roadway points in
the direction of finding employee status for the Ontario
and Pomona drivers.40
Other support for employee status can be found in
Roadway’s compensation package for the drivers.41
Here, Roadway establishes, regulates, and controls the
rate of compensation and financial assistance to the driv-
ers as well as the rates charged to customers. Generally
speaking, there is little room for the drivers to influence
their income through their own efforts or ingenuity.
Whatever potential for entrepreneurial profit does exist,
Roadway suppresses through a system of minimum and
maximum number of packages and customer stops as-
signed to the drivers. For example, when a driver be-
comes busier and the number of packages or customer
stops grows, his territory may be unilaterally reconfig-
ured, and the extra packages or stops are reassigned if the
driver has already attained the maximum level for his
primary service area that has been already determined by
Roadway. “[I]t is clear that, unlike the genuinely inde-
pendent businessman, the drivers’ earnings do not de-
pend largely on their ability to exercise good business
judgment, to follow sound management practices, and to
be able to take financial risks in order to increase their
profits.” Standard Oil Co., supra, 230 NLRB at 972.
The weekly settlement sheets supplied by Roadway
show that the main components of the drivers’ income
are the van availability settlement, the temporary core
zone settlement, and the piece-rate payments for pack-
ages delivered and picked up.42 The daily van availabil-
ity settlement is virtually guaranteed income of $40 per
day for the life of the driver’s contract with Roadway.
Because the 1994 Agreement requires the driver to make
his vehicle available each weekday over a period ranging
from 1 to 5 years, the driver must show up for work each
day to fulfill his contract obligations. This is not a situa-
tion where “[e]ach driver can decide not to work on any
particular day—a freedom that further links his compen-
sation to his personal initiative and effort.” Amber De-
livery Service, supra at 61.
40 We also note that while the drivers are responsible for obtaining
various types of insurance, Roadway offers them the opportunity to
participate in group insurance rates that are negotiated by it. The new
driver brochure advertises such insurance as “[a]vailable through RPS.”
Even “optional” insurance such as medical, dental, life, and disability
insurance, is available through Roadway and based on group rates.
41 Notwithstanding its assertion to the contrary, Roadway maintains
a “start-up loan program” for new drivers whose incomes are insuffi-
cient to meet their expenses.
42 We note that the Agreement provides for a minimum payment by
Roadway to any driver who is forced to relinquish customer stops to
Roadway. In this way, Roadway minimizes the driver’s loss of income
due to the unilateral reduction of his customer base. The Board in
Frito-Lay, Inc., 178 NLRB 611, 612 (1969), found that a similar ar-
rangement was suggestive of employee status.
ROADWAY PACKAGE SYSTEM, INC. 853
In a similar fashion, the temporary core zone settle-
ment subsidizes the driver’s income. With the 1994
Agreement, the driver receives this supplement until he
reaches the “normal” range of pickups and deliveries for
his service area. In this way, the temporary core zone
settlement serves as an important safety net for the fledg-
ing driver to shield him from loss, and it guarantees an
income level predetermined by Roadway, irrespective of
the driver’s personal initiative and effort in his service
area.
Income from each delivery and pickup, the last major
compensation component, may vary among the drivers.
This variance stems not from the drivers’ entrepreneurial
efforts but from the differences in customer bases that
were assigned to the drivers. When it established the
geographic boundaries of the service areas prior to 1994,
Roadway did not assign equal customer bases to the ser-
vice areas. Because these service areas largely remain
the same today, these built-in differences directly affect
the drivers’ compensation. Although Roadway states
that drivers can, and have, secured new customers, there
is no evidence that such additional customers have sig-
nificantly affected the earnings of any driver.43
Roadway stresses that two items in the 1994 Agree-
ment—the driver’s proprietary interest in his service area
and his right to sell all or part of his area to the “highest
bidder”—allow the drivers to influence their profits like
entrepreneurs. We disagree because Roadway has im-
posed substantial limitations and conditions on both new
features of the driver’s relationship such that neither one
retains any significant entrepreneurial characteristics.
Under the terms of the Agreement, Roadway has con-
siderable control over whether the driver may sell at all,
to whom, and under what circumstances. Roadway can
and has influenced, if not forced, complete or partial
sales of service areas. Regarding the few sales to which
participants testified, it appears that the drivers had little
choice, entrepreneurial or otherwise, but to sell. The
evidence establishes that these drivers were pressured to
sell by Roadway’s warning or threat that their service
areas would be reconfigured and customer accounts reas-
signed, or worse, that their entire relationship with
Roadway would be terminated.
Pursuant to the 1994 Agreement, Roadway can unilat-
erally reconfigure a driver’s primary service area if he
cannot demonstrate, “using means satisfactory to RPS,”
his ability to satisfy the customer service requirements in
his area. To illustrate the meaning of “using means satis-
factory,” Roadway asserts that a driver facing a forced
reconfiguration has options, other than selling, from
which to choose, including acquiring a second van, add-
ing an attached trailer or hiring a helper or second driver

43 See Amber Delivery Service, supra at 62 (where “[a]ll customers
‘belong’ not to the drivers but to Amber” is a factor supporting em-
ployee status).
to handle the customer requirements in his service areas.
There is no evidence that any driver confronting the pos-
sibility of reconfiguration by Roadway has made use of
these alternatives.
Furthermore, it is unclear whether any driver has
gained or profited materially from the sale of his service
area. For the most part, the evidence consists of unveri-
fied and incomplete information contained in e-mail
messages between Director Breese and some other man-
agers, none of which were parties to these transactions. It
fails to provide important details about the sales identi-
fied.44 For instance, there is no indication if the reported
sales figures include the cost of the driver’s delivery ve-
hicle (estimated to be from $22,000 to $39,000), in addi-
tion to the value of the service area, or portion thereof,
sold. Without this kind of detail, there is no way for us
to determine whether the drivers realized any gain or
profit from the sale of their service areas.
The testimonial evidence shows that the sales by driv-
ers Gonzales, Irions, Hawkins, and Steenburgen took
place at Roadway’s behest, if not direction to the drivers,
to sell or risk having their entire contract terminated. No
gain was shown. In a system of over 5000 drivers as-
signed to over 300 terminals, we find that these few
forced sales, given their circumstances, are insufficient to
support a finding of independent contractor status.
B. Comparison with Roadway I
Roadway makes much of the fact that it has effectu-
ated some changes in its relationship with the drivers
since Roadway I. None of these changes require a find-
ing of independent contractor status in these cases.
While Roadway has created a proprietary interest and the
right to sell service areas, the evidence falls short of
demonstrating any real or tangible benefit from these
new rights. In addition, Roadway’s elaborate support
programs continue to present drivers with minimal risks.
Other indicators of entrepreneurship, such as performing
outside work, business incorporation, use of additional
drivers or helpers, or incentive-based income, continue to
be absent.
Roadway also continues as before to control the man-
ner and means of performing deliveries and pickups.
The daily regimen of drivers has not changed signifi-
cantly. Other controls from the prior case remain the
same, such as mandated uniforms, appearance standards,
and vehicle specifications, logos, and color schemes.
Roadway provides the source for equipment required by
the agreement, albeit using third parties, under a system
which it created and controls.
44 Roadway explains that it chose not to have other witnesses (who
apparently had knowledge of these sales transactions described in
Roadway’s Exh. 5) testify at the hearing because the Petitioner stipu-
lated to this exhibit. Because there is no such stipulation by the Peti-
tioner in the record, we reject Roadway’s explanation.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 854
Although there is no evidence of a discipline system,
admonishment of drivers, a grievance procedure, or ter-
mination of drivers without cause, the elimination of
these controls from the prior case does not outweigh the
other strong factors indicating employee status.45 Simi-
larly, as before, evidence that no benefits are received by
drivers and that for tax purposes they are treated as inde-
pendent contractors does not outweigh the various indi-
cia of employee status.46
VI. CONCLUSION
Weighing all the incidents of their relationship with
Roadway, we conclude that the Ontario and Pomona
drivers are employees and not independent contractors.
Accordingly, the Decision and Direction of Election in
Case 31–RC–7267 is affirmed. In Case 31–RC–7277,
we find that the following employees47 of Roadway con-
stitute an appropriate unit for the purposes of collective
bargaining within the meaning of Section 9(b) of the Act:

Included: All pickup and delivery drivers employed by
the Employer at its facility located at 1235
Grand Avenue, Pomona, California 91766.

Excluded: All other employees, including Temporary
B drivers, office clerical employees, guards,
and supervisors as defined in the Act.

We remand both cases to the Regional Director for fur-
ther processing consistent with our decision.

[Direction of Election omitted from publication.]

45 Under the 1994 Agreement, there are, however, bonuses for fault-
free driving and long service.
46 We reject Roadway’s assertion that the Regional Director in the
Ontario case erred by allegedly discounting an Internal Revenue Ser-
vice “letter of assurance.” That letter indicated that operations con-
ducted in accordance with the 1994 Agreement would not be inconsis-
tent with the treatment of the drivers as independent contractors. We
find that the Regional Director appropriately considered the letter, and
correctly concluded that it is not dispositive of the issue under consid-
eration here. The Regional Director pointed out that the letter of assur-
ance made clear that the IRS’ position was based on “a series of con-
ferences” and other letters between the IRS and Roadway. He further
noted that while such determinations can be considered by the Board,
they are not controlling factors.
Our determination of the status of the Ontario and Pomona drivers is
based on the lengthy record in the two cases before us. In contrast, the
1995 IRS ruling appears to be based only on the terms of the 1994
Agreement “and consideration of all the representations made by you
[Roadway] and your counsel.”
Similarly, we do not find controlling the individual IRS determina-
tions regarding three drivers that were submitted by Roadway after the
oral argument was held. Except for a reference to the 1994 Agreement,
these letters fail to describe the evidence on which these determinations
were based.
47 The two Temp A drivers and drivers Jaime Calderon and Roberto
Gonzales are permitted to vote under challenge. Drivers David Marti-
nez and Juan Orozko are excluded from the unit.
CHAIRMAN GOULD, concurring.
I join my colleagues in the articulation and application
of the common-law agency test to find that the peti-
tioned-for drivers are employees within the meaning of
Section 2(3) of the Act. I write separately because I dis-
agree with my colleagues’ finding that the drivers here
differ from the owner-operators found by my colleagues
to be independent contractors in Dial-A-Mattress Operat-
ing Corp., 326 NLRB No. 75 (1998). For the reasons
stated in my dissenting opinion in that case, I would find
that the owner-operators in Dial-A-Mattress, like the
drivers here, are not independent contractors.
I also write separately to address an issue not reached
by my colleagues. I would reverse current Board prece-
dent and find that controls mandated by Governmental
regulations should be considered probative of an em-
ployer-employee relationship.
Current Board precedent holds that Government-
imposed regulations do not show company control and,
therefore, cannot constitute a factor favoring a finding of
employee status. See, e.g., Don Bass Trucking, Inc., 275
NLRB 1172 (1985), and Air Transit, Inc., 271 NLRB
1108 (1984). The central rationale for this holding is that
“Government regulations constitute supervision not by
the employer but by the state.” Air Transit, Inc., supra at
1110, citing Seafarers Local 777 (Yellow Cab) v. NLRB,
603 F.2d 862, 875 (D.C. Cir. 1978). I do not subscribe to
this rationale and would return to the Board’s earlier po-
sition, expressed in Mitchell Bros. Truck Lines, 249
NLRB 476 (1975), that controls placed by the employer
upon workers are indicative of an employment relation-
ship, regardless of whether the employer imposes the
controls because of Government regulation or for inde-
pendent business reasons.
In Mitchell, the Board held that the important aspect of
regulations imposed by the Government is the relation-
ship between the carrier and the drivers, not the reasons
for the relationship. The Board stated:

[I]t matters not whether the controls placed on the
driver emanate from Mitchell Bros. independently, or
whether these controls are imposed on Mitchell Bros.
which in turn, imposes them on the drivers. Either
way, these controls define the carrier’s employment re-
lationship with its drivers. Id. at 480–481.1

In my judgment, this is the proper means of analyzing the
impact of Governmental regulation on the relationship be-
tween drivers or owner-operators and carriers.2
1 The Board thereby departed from a line of decisions holding, often
over dissents by Members Fanning and Jenkins, that regulations im-
posed by Governmental fiat are not alone sufficient to establish em-
ployee status. See, e.g., Portage Transfer Co., 204 NLRB 787 (1973);
George Transfer & Rigging Co., 208 NLRB 494 (1974); and Reisch
Trucking & Transportation Co., 143 NLRB 953 (1963).
2 See also Rediehs Interstate, Inc. 255 NLRB 1073 (1980), and Rob-
bins Motor Transportation, Inc., 225 NLRB 761 (1975).
ROADWAY PACKAGE SYSTEM, INC. 855
It is true that the Government is the source of the regu-
lations and that the carriers have no choice but to impose
the regulations if they wish to do business. However, it
is also true that the Government does not directly interact
with the drivers or owner-operators. As the dissenting
opinion stated in George Transfer & Rigging Co., supra,
208 NLRB at 498, cited with approval in Mitchell:

It is irrelevant . . . that some of the rules enforced by
George emanate from the Interstate Commerce Com-
mission, the Department of Transportation, or other
Government agencies. For, surely, as this record
shows, the drivers controlled by George are not under
the aegis of those agencies, but under the complete and
operative authority of George, subject to losing their
employment at the will of George.

And that, in my view, is the heart of the matter. To the
extent that the Government sets regulations, it relies on
the carriers to impose and enforce them. The only “face”
the drivers see is that of the carrier, not the Government.
The reality of such a situation is that of an employment
relationship where the carrier has significant control over
the drivers’ job performance.
This view also is more in keeping with the Supreme
Court’s rulings in this area. In NLRB v. United Insur-
ance Co. of America, 390 U.S. 254 (1968), and NLRB v.
Town & Country Electric, 516 U.S. 85 (1995), the Court
held that the common law of agency must be applied in
determining whether employee status exists. The source
or motivation for imposing control is not a factor in the
common law of agency. Instead, the law focuses solely
on the objective presence of control. See Restatement
(Second) of Agency (1958), section 220. Under this ana-
lytical approach, it matters not why the master exerts
control; it matter only that the master exerts control.
Accordingly, when assessing factors to determine
whether an employment relationship exits, I would find
that the factor of Government-mandated controls im-
posed by the employer weighs heavily toward a finding
of employee status.

APPENDIX
REGIONAL DIRECTOR’S DECISION AND DIRECTION
OF ELECTION
. . . .
The record in this matter indicates that contractors’ jobs may
be simply stated as the transportation, delivery, and pickup of
small packages between the Ontario Terminal and RPS cus-
tomers, using vans contractors own or lease. The manner and
means of how these ends are accomplished are the sum and
substance of this case.
The process of becoming a contractor may begin by respond-
ing to a newspaper advertisement, or by a current driver (such
as a current contractor’s “employee,” or a “Temp A”) signing
the Agreement, and acquiring a van and an area to service. The
initial contractor process to become an eligible driver (includ-
ing a Temp), includes four steps: the applicant completes an
“information sheet,” attends a “focus group,” goes on a “ride
along” with an existing contractor or temp, and completes a
DOT file.
RPS asserts that the contractor “information sheet” form and
not an employee “job application” form is filled out by pro-
spective contractors and temps. The “information sheet” differs
from a “job application” form completed by prospective RPS
employees in that a “job application” form would not have
similar license-request information, the applicant’s driving
record portion would not be present, and there would be no
vehicle information portion or particular equipment experience,
while RPS’ “job application” includes the potential applicant’s
qualifications for the position sought, as well as other general
information found on the “information sheet,” such as name,
address, and social security information, and possibly the same
information regarding convictions for criminal conduct. Both
“job application” and “information sheet” forms require some
type of personal references, and both contain an education sec-
tion. As RPS testimony indicated, “Are there parallels be-
tween the application and the information sheet? Absolutely.
Is it job specific? Absolutely.” After completion of the “in-
formation sheet” (and apparently the “job application” forms)
at the terminal, the received data for both contractors and RPS
employees is transmitted to an appropriate office in RPS’ cor-
porate headquarters in Pittsburgh for approval.
In a focus group, which is a formal orientation conducted by
RPS’ Recruiting Department for a group of 4 to 12 potential
contractors, RPS’ “independent contractor concept” with all of
its specifics and details, is discussed. Among the items ex-
plained are how “settlement” (remuneration) figures are deter-
mined, and what the expected costs of operation and projected
revenues are based on hypotheticals. Also, the Agreement
itself is explained: how much is paid by RPS for a package; a
stop and a pickup; and the “Core zones” concept. RPS tells
prospective contractors that there is a risk of depreciation of the
van they must purchase or lease, and of their proprietary inter-
est in their service area.
In addition to the formal “focus groups,” managers at the
Ontario Terminal have given information on a more spontane-
ous one-on-one type basis with some potential contractors who
were “walk-ins.” These people usually appear after having a
conversation with a current RPS contractor. They will com-
plete an “information sheet,” and a management official will
give them a “mini focus group on a one-to-one basis” to intro-
duce RPS’ “independent contractor concept” and give the per-
son “an opportunity to say it’s not for me before they go and
spend two or three hours perhaps in Los Angeles 60 miles from
our location and waste their time.”
After the potential contractor fills out the contractor “infor-
mation sheet,” he does a “ride along” with a contractor and, if
still interested in becoming a contractor, completes a DOT file.
If necessary, he takes a DOT medical exam and a drug test.
The responsibility for taking and paying for the physical is the
applicant’s.
After having successfully completed an “information sheet”
the DOT file requirements, the focus group and the ride along,
the applicant is eligible to be a driver in the capacity of a temp
or a contractor. The only difference between a “temp A” and a
“temp B” is that a “temp A” is someone who wants to be a
contractor.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 856
At some point during the initial orientation process for driv-
ers, RPS informs them that the Agreement establishes standards
of appearance—both for themselves and for their vans. For
example, the “Agreed Standard of Service” part of the Agree-
ment, §1.10(e), requires contractors to:

Foster the professional image and good reputation of RPS and
Contractor with shippers and consignees, including adhering
to the vehicle identification and operator appearance standards
specified in Paragraphs 1.5 and 1.12 of this Agreement.

The Agreement, at §1.5, provides for the vans’ identification
with logos, colors, and other marks.8 The Agreement, at §1.12,
in addition to requiring that the contractors’ vans be “main-
tained in a clean and presentable fashion free of body damage
and extraneous markings,” requires contractors (and their em-
ployee-drivers or helpers if there are any) to wear:

An RPS-approved uniform, maintained in good condition,
and will otherwise keep his/her personal appearance consis-
tent with reasonable standards of good order as maintained by
competitors and promulgated from time to time by RPS.

Testimonial evidence indicated that at least some RPS stan-
dards are not uniformly applied throughout the system. For
example, one contractor testified that he had a beard, mustache,
and long hair when he first became a contractor. The Ontario
Terminal manager informed him that it was RPS policy for
contractors to have a shorter haircut and no beard or mustache.
Shortly after the contractor had his hair shortened and his beard
and mustache removed he saw, in RPS’ national magazine
photos of contractors with long hair and beards. He then grew
back his beard, mustache, and hair.
In the first 30 days after a person becomes a new contractor
he goes through an orientation program where he is shown how
to fill out forms and use the on-van scanner and computer. Four
times during the course of a year, an RPS coordinator may ride
with the contractor to see if the standards of customer service
that the Agreement requires are being met.
RPS management has the right, under §1.14 of the Agree-
ment, to engage in four “Customer Service Rides” or, as they
are also known “ride-alongs.”9 Section 5.2 of the Agreement
also provides, in part, that:

Contractor agrees to cooperate with the reasonable efforts of
RPS in gathering data necessary to evaluate Contractor’s Pri-
mary Service Area, including permitting, RPS personnel to
ride with Contractor from time to time in connection with
these efforts.

While RPS testified that “if the customer service ride is initi-
ated solely [by] RPS . . . [the number of such rides is] limited
to the number that’s specified in the contract.” Section 5.2 of
the Agreement establishes no limitation on the number of “Cus-
tomer Service Rides.” There is also evidence that on more than

8 The Agreement, at §1.5, provides in part:
Contractor agrees to mark Equipment while in RPS’s service
with such identifying colors, logos, numbers, marks and insignia
as may be required either under applicable regulations . . . or to
identify the Equipment as apart of the RPS system.
9 The Agreement, at §1.14, provides in part:
Qualified RPS terminal personnel may, at their option, visit
customer locations with Contractor four times annually to
verify that Contractor is meeting the standards of customer
service provided in this Agreement.
one occasion RPS has requested a “Customer Service Rides”
with a particular contractor, and the contractor has refused for
that particular day.
Evidence was adduced at the hearing reflecting a particular
Customer Service Ride that took place on September 21, 1994.
Testimony disclosed that all the comments on the “Customer
Service Ride Recommendations” form were written by the
coordinator who was conducting the ride. Comments included
“Time spent at each [customer] stop should be shortened—less
‘chit-chat’ and faster pace.” Oral comments by the coordinator
to the contractor during the ride indicted that the “less ‘chit-
chat’ and faster pace” comments were general, not in reference
to any particular customer or stop. One contractor testified that,
after he had asked for his service area to be reconfigured be-
cause he felt unable to adequately service the entire area with-
out adding equipment, RPS conducted several “Customer Ser-
vice Rides.” Nevertheless, after a point in time this contractor
felt that RPS had sufficient information to make a determina-
tion, yet RPS continued to request additional Customer Service
Rides, which the contractor refused to permit. As he testified,
the Ontario Terminal manager:

had initiated what I felt [was] a policy of sending [supervi-
sors] out with me on customer service rides . . . as a matter of
discipline. [The Ontario Terminal manager] told [a particular
supervisor] . . . you ride with him and you make sure he gets
it all done.

The evidence reflected a strong desire of this particular contrac-
tor to have his area reconfigured, to reduce his workload; yet
absent RPS’ consent, his only option would have been to termi-
nate his Agreement. Nonetheless, when RPS desires to recon-
figure a route after providing the affected contractor a few days
notice of its intent it can do so unilaterally (albeit paying the
contractor an RPS-determined fee for lost stops).
If RPS attempts to terminate a contract, including a construc-
tive termination based on any asserted infraction by the
contractor, the Agreement, at §12.3, provides for an arbitration
of the dispute in “accordance with the Commercial Arbitration
Rules of the American Arbitration Association.” Recommen-
dations for termination are made by the terminal manager to
RPS’ regional manager. If he disagrees with the recommenda-
tion, it is returned to the terminal manager; if he agrees that the
contract should be terminated, he passes his recommendation to
RPS’ Contractor Relations Department and RPS’ in-house legal
consultant. Some bases for the termination of a contract in-
clude a contractor’s failure to pass a drug test, thefts, having
repeated accidents, safety violations, customer complaints,
assaults, not showing up, failing to service a work area, and
falsification of RPS records. These bases often show up in
notes made and kept by RPS management.
If anyone in RPS management—including the regional man-
ager, the Ontario Terminal manager, the P & D coordinator, or
the account reps—believes that a contractor is failing to provide
adequate customer support, he may engage the contractor in
what RPS terms a “business discussion,” which may, generate a
“business discussion document.” The name for this document
was at some point supplanted by a “contract discussion notes”
form. Contractors do not have access to these documents,
which are maintained by the P & D manager in his own office.
RPS testified that these forms represent:

ROADWAY PACKAGE SYSTEM, INC. 857
A record of business activity of the contractor. [W]ould we
consider those forms when considering not to renew [a con-
tractor’s relationship with RPS?] Yes, we probably would.
Q. Do you consider those forms when you consider
termination of a contract for cause?
A. Yes.

Specifically, RPS’ P & D manager agreed that some of his
“business discussion notes [had] been used to support the ter-
mination of a contract.”
An item that might be included in a “business discussion,” or
a “business discussion document,” is where a contractor erro-
neously or frequently marks a package with an incorrect infor-
mation code. Another example provided by RPS:

If, for instance, a contractor returned 10 packages upon his ar-
rival back to the terminal and indicated . . . that a business was
closed when in fact that business was open, then there may be
discussion notes made. Discussions would be held with the
contractor that would be referenced to the particular articles of
the contract that were in violation of ICC rules or what have
you. And repeated instances of that same type of situation
would be addressed in the same way.

All the Ontario Terminal contractors, but none of the other
Ontario Terminal drivers, use vans which they personally own
or lease. In Roadway I, the Board found that “RPS maintains
vehicles onsite that drivers can purchase or lease,” that 12 of 14
drivers obtained their vans from this source, and that 11 of
these 12 financed their purchase through the same credit com-
pany (not RPS). Forms used for the credit purchases were ob-
tained from RPS, and on termination of their relationship with
RPS, drivers indicated that they were released from their fi-
nance obligations on transfer of their van to RPS. The transfers
were almost simultaneous with their terminations.
The record in this case reflects that RPS has no ownership
interest in the contractors’ vans, and does not directly sell or
lease vans to contractors. It does appear, however, that the ar-
rangement for obtaining an appropriate van is lubricated by
RPS. First, each year RPS purchases a substantial number of
vans that meet its specifications from Navistar, its primary van
supplier. The annual number of vans purchased on a nationwide
basis was estimated at the hearing to be 200 P-1000s, 100 P-
600s, and perhaps some others.10 RPS then sells these vans to
Bush Leasing, in which RPS assertedly has no financial or
other ownershp interest, and which it has used since about the
late 1980s. RPS will tell new contractors, when they begin the
contractor relationship, which size van to obtain on the size of
the contractor’s designated work area and amount of business
in it. According to RPS testimony, “we will set the minimun
size requirement that’s needed for a particular work area. . . .
We have minimun specifications that we’ll give them.” These
specifications may include, in addition to Department of Trans-
portation (DOT) requirements, size, color, possibly heavy-duty
springs, heavy-duty transmission, shelves on the inside or a
well door in the back. While RPS will not sell a van directly to
a contractor, it will tell him, frequently during the “focus
groups” held for new contractors, that “we have a van that
meets our specifications, it’s brand spanking new and you can

10 The Record indicated that the approximate cost of vans ranges from
$22,000 for the smallest through $39,000 for the largest. The estimated
cost of a tractor owned by one Ontario Terminal contractor was about
$44,000.
buy it. You can go to your credit union and buy it . . . and we
have recommended Bush Leasing.”
Drivers are under no obligation to buy or lease from Bush
Leasing, RPS does not participate in the negotiations between
the contractor and Bush Leasing, and RPS does not guarantee
loans to drivers if they finance their van purchases, whether or
not they lease/purchase from Bush Leasing. RPS will not, how-
ever, permit a contractor to use a van purchased or leased from
any source, other than another contractor (which is frequently
done) or Bush Leasing, if it is more than 3 years old. RPS’
explanation for this policy is:

If . . . it’s an RPS van that’s been in service, that’s all right be-
cause we know that it’s been maintained, we have the mainte-
nance records on every piece of equipment, we know that the
van meets our specifications. We can track the maintenance
history.
Q. What if the contractor had records for a vehicle
showing maintenance for a vehicle that was more than
three years old?
A. If it’s a non-RPS spec’ed vehicle and it’s older than
three years, they are not allowed to be brought on.

In addition, RPS inspects vans before contractors are permit-
ted to put them in service. While this inspection is, in part, to
guarantee compliance with DOT regulations and to confirm
that the vans are safe to operate, RPS testimony indicated it is
also to insure that the vans meet RPS’ specifications, and “to
make certain that the van reflects on a good professional ap-
pearance. That is, it’s not too old, it doesn’t have big windows
cut in the side. . . . We want to make certain that it presents a
good professional appearance.”
Even though van maintenance is primarily the contractor’s
responsibility, RPS has a contractual concern regarding the
appearance of vans.11 If a terminal manager believes a van has
body damage or needs paint, he and the contractor “would dis-
cuss it . . . and they would work out some reasonable means
and time to get it repaired.” There have been disagreements
between a contractor and a terminal manager regarding the
need for repair or paint on numerous occasions at the Ontario
Terminal. Higher cooperate authority—”contractor relations”—
is then involved; the denouement has been that “the contractor
is allowed to continue in operation until such time as he has the
funds to get the necessary repairs.” As RPS asserts, “the ulti-
mate responsibility would be their terminal manager[’s] to de-
termine whether or not the vehicle was cosmetically and ap-
pearance-wise maintained.”
Under the terms of the Agreement, the contractor is directly
responsible for maintaining the safe operating condition of his
van although DOT regulations hold the carrier—here, RPS—
jointly accountable. Contractors are personally responsible for
all costs associated with owning/leasing and operating a van,
including insurance, licenses, taxes, fuel, oil, maintenance, and
replacement of broken or worn parts such as tires and batteries.
When “mutually convenient,” however, RPS will pay the con-
tractors’ licenses, taxes, and fees, then charge the contractors
for any such payments made on their behalf.12
11 The Agreement, at §1.12, provides in part:
The Equipment shall be maintained in a clean and presentable
fashion, free of body damage and extraneous markings, in ac-
cordance with the standards of the industry.
12 The Agreement, at §1.3, provides in part:
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 858
RPS provides no onsite maintenance service for contractors’
vans at the Ontario Terminal. While contractors may choose
where and when maintenance is performed, and are directly
responsible for paying for such work. RPS posts charts on van
windows to remind contractors when certain maintenance is
necessary. The information on these charts includes when a
contractor should perform oil and fluid changes, filter changes,
tire rotation, and when he should check tread depth, brake lin-
ings, and clutch-free play.
When a van is out of operation for maintenance or repair, it
is the contractor’s responsibility to rent another van to insure
that the packages in his service area are delivered and picked
up. Some RPS terminals, not including the Ontario Terminal,
keep a spare van that contractors may rent from RPS on days
that their equipment is out of service. If a terminal’s spare van
is not available, as at the Ontario Terminal, the contractor must
rent a suitable van from a commercial rental agency such as
Ryder, Rollings, or Penske. Although RPS is not directly in-
volved when a contractor rents a van, RPS has negotiated a
national contract with Ryder, Penske, and perhaps also Rollins
“so that a good rate is provided to contractors.”
While there is no established buy-back arrangement of vans
between RPS and contractors, RPS testimony reflected that:

From time to time . . . if a contractor was upgrading, moving
from a smaller van to a bigger van or from an older van to a
newer van and his van that he was going to sell or get rid of
was in pretty good shape, we would inspect it. We did buy
some of those at fair market value to use as company spares.
But there is no arrangement [that] if he leaves, we buy his van
back.

RPS testimony also disclosed that if a contractor leaves, RPS:

would . . . help another contractor or put another contractor in
touch with that former contractor to buy his van . . . when a
contractor leaves the company, he has no further use for the
van and we help another contractor get in it.

The evidence indicated that since the Agreement went into
effect, RPS has not purchased the van of any contractor whose
contract has terminated.
In addition to compensating contractors based on the number
of packages they pick up and deliver, as discussed below, RPS
also pays contractors a “contractor and van availability settle-
ment.” As explained by RPS, the purpose of this payment is:

To compensate a contractor for his fixed costs in operating
that van. It’s something he can count on every day. Regard-
less of the number of packages and stops he’s going to make,
he knows he’s going to get at least $40 that may help pay for
his fixed costs, his fuel or whatever.

The “contractor and van availability settlement” provides an
additional daily bonus, up to $100, for working on business
days falling immediately before and after national holidays.
RPS requires that contractors purchase and maintain a scan-
ner and handheld computer in their vans. While contractors are
free to purchase this equipment anyplace, in practice all Ontario

To facilitate payment of licenses, taxes and fees, where mutu-
ally convenient or otherwise require by statute or regulation,
Contractor hereby authorizes RPS to pay these charges on Con-
tractor’s behalf and to charge Contractor for any such payments,
together with any direct expenses incurred by RPS in connection
with their payment.
Terminal contractors have acquired it directly through RPS.
Training on the use of this equipment may be by other contrac-
tors, but RPS assumes the ultimate responsibility of insuring
that drivers are trained and know how to use this electronic
equipment. The scanner is used by a contractor when he deliv-
ers packages—he scans the packages’ bar codes, then uploads
that information into the on-van computer, which transmits the
information to RPS customer service in Pittsburgh, Pennsyl-
vania. RPS customers can call an 800 number to find out
where, en route, a package is.
Contractors assertedly may use their vans for any personal
use they desire, including other commercial purposes, and tes-
timony indicated that at locations other than the Ontario Termi-
nal, contractors have used their van for moving furniture on a
weekend. If a driver desires to use a van for such purpose, the
Agreement requires him to cover all the RPS identification on
the van; it also specifies how to effectuate this masking.13
There was, however, no evidence that any Ontario Terminal
contractor has used his van for any commercial purpose other
than the transport, delivery, and pickup of packages for RPS.
There is no restriction on the number of vans a contractor
can own/lease. Nationally, approximately 7 percent of RPS’
contractors have more than one van; at the Ontario Terminal,
only one contractor, at this time, has more than one van. If a
contractor wishes to add a van, however, he must ask RPS for
authorization to add a specific piece of equipment. Such re-
quest is made by the contractor, on a RPS form, to the terminal
manager, who forwards the request to the Regional Manager,
and eventually to corporate headquarters in Pittsburgh, Penn-
sylvania, for final approval.
To assist contractors in the execution of their jobs to meet
RPS’ standards, RPS provides, at paragraph 7 of the Agree-
ment, a voluntary “Business Support Package,” which costs
contractors $40/week. This package includes:

Supply of a clean uniform each business day [which drivers
are required to wear]; lease of RPS-owned scanners, printers
(where applicable), and communications equipment necessary
for customer service; annual D.O.T. inspection; wash ser-
vice [14] for the Equipment . . . at sufficient frequency to keep
the Equipment in compliance with the Appearance Standard
of [the Agreement] and the opportunity for Contractor, solely
at Contractor’s discretion, to purchase from vendors, at RPS-
negotiated prices, tires, batteries, bumpers, package-handling
equipment, body repairs, preventive maintenance services,
and paint.

As RPS testimony notes:

The Business Support Package is not mandatory. What is
mandatory is that the equipment that’s provided in the busi-
ness support package must be used by the contractor. The
scanner, the on-van communications device, and the other
parts of the business support package are required but to buy
13 The Agreement, at §1.5, provides in part:
Contractor may use the Equipment for other commercial or
personal purposes when it is not in the service of RPS, with the
understanding that all such identifying numbers, marks, logos and
insignia will be removed or masked (by paper or plastic overlay)
when the Equipment is so used.
14 For example, RPS arranges for an independent-service vendor to
come to the Ontario Terminal with a generator, long hose, brooms, and
soap to wash vans on Mondays and Wednesdays in the very early
morning hours before the vans leave the terminal.
ROADWAY PACKAGE SYSTEM, INC. 859
the business support package is not required. The contractor
has the option of going out and purchasing those items on his
own. [Emphasis added.]

If a contractor does not participate in the Business Support
Package, as noted above he must purchase the required on-
board electronic equipment (the scanner or computer) at his
own expense. If RPS upgrades or changes this equipment (at its
unilateral discretion), the contractor is obligated to similarly
upgrade and/or change his personally-purchased equipment. If
the contractor participates in the Business Support Package, this
equipment is upgraded/changed automatically at no additional
cost to him. The record indicates that all Ontario Terminal con-
tractors participate in the Business Support Package.
For the convenience of, and as a service to contractors, RPS
maintains a “service guarantee program.” This program’s pur-
pose is to encourage contractors “to put some money aside for
these rainy days when their engine blows or the clutch fails or
they have flat tires or something.” As explained by Company
testimony:

We established an interest bearing fund and we said if you
will put some money in this fund and keep some money in
this fund we will on a quarterly basis make a contribution to
this fund for your use, any way you want to use it, for any
purpose. And we established . . . that if a contractor keeps an
average balance of $500 or more in this service guarantee ac-
count, we will contribute an additional $100. If he keeps be-
tween $750 and $1000 or more, we will contribute $200
every quarter to a maximum of $800 a year. And that is 80
percent interest. That ain’t bad. And most of our contractors
do participate in that program.

A contractor may also borrow money from this fund if the loan
is covered by the amount of money in his account.
Contractors’ compensation may come from the following
sources, as set forth in the Agreement:
1. Package Pick-Up and Delivery Settlement, which in-
cludes a specified fee for every delivery van stop and
package delivered, a different fee for each pickup stop
with a sliding scale for the number of picked-up pack-
ages, and other specified fees for other types of pack-
ages, pickups, and deliveries.
2. Contractor and Van Availability Settlement, discussed
above.
3. Temporary Core Zone Density Settlement, as detailed
in §4.1(c) of the Agreement. This payment represents a
supplement given to a contractor for servicing a particu-
lar area. As explained at the hearing, if a particular core
zone in a contractor’s area is a substantial distance from
the terminal, and/or it has an unusually low population
density (which results in fewer packages being picked
up and delivered), a formula is devised—and adjusted
each August by RPS headquarters in Pittsburgh—
designating a supplemental amount to be paid to the
contractor for servicing this particular core zone. Con-
tractors have no control over this formula, and since
they can do nothing about the distance of a core zone,
from the terminal or the population or package-delivery
density of a core zone, there appears to be no direct in-
put or control contractors have regarding this core zone
rate. Contractors can and have asked RPS to reevaluate
the formula’s rate based on transitory events. An ex-
ample noted at the hearing was of additional delivery
problems in the core zone encompassing the part of
downtown Los Angeles that was impacted by metro rail
construction for many months.
4. Flex Program, which provides a supplemental daily $5
fee for contractors who choose to participate. Under the
Flex program, drivers agree to accept overflow pack-
ages from another driver’s load (and of course be paid
for the delivery of such packages). The daily fee is re-
ceived whether or not the driver receives any “flex” on
a particular day. If a driver does not participate in this
program, he cannot be forced to pick up or deliver
packages in another driver’s primary service area.
While voluntary, all Ontario Terminal contractors par-
ticipate in this program. Determinations to “flex” may
be made directly between drivers or by the preload co-
ordinator in charge of the package handlers while they
are loading the vans prior to the driver’s arrival. The
coordinator’s decision is based on a preexisting “flex
matrix” that has been standardized for a group of work
areas by consultation between contractors and the coor-
dinator. When a contractor is not present when a coor-
dinator determines that a “flex” is necessary, the coor-
dinator uses “min/max numbers” as guides to determine
whether the number of packages to be delivered within
one service area exceeds the contractor’s delivery capa-
bilities and should be handled by another contractor.
“Min/max numbers” represent the minimum and maxi-
mum number of delivery stops for a service area. It is
computed by a formula based on information gathered
during customer service rides, stem miles (i.e., distance
from the terminal before an area is reached), particular
customer-related delays (such as checking in with a
guard service for area access, and normal traffic condi-
tions on route.) When that min\max number is ex-
ceeded, the coordinator “flexes off” the excess packages
to another driver.
5. Quarterly Performance Settlement, which is a 2.25 per-
cent payment to contractors by RPS of a contractor’s
gross settlement for a quarter. The only requirements
are that the contractor must have been a contractor for 1
full year, and the contractor must still be an active con-
tractor—his contract may not have terminated.
6. Service Bonus, which provides for a payment of $500
per year for each of a contractor’s first 4 years under
contract, and $1000 per year for each succeeding year.
If a contractor has additional vans operated by his “em-
ployees,” a service bonus is similarly computed for each
such van.
7. Contractor Customer Service (CCS) Payments, which
are bonuses paid every 4 weeks based on an absence of
customer complaints both with regard to the particular
contractor, and for all contractors at a particular termi-
nal.
On most days, most of the contractors’ vans are left in their
terminal at the end of the driver’s workday for unloading, and
to be available for the next day’s packages. From about 1:30
a.m. to about 6 or 8 a.m., package handlers (also termed load-
ers) sort and place the packages that have just been delivered to
the terminal by the line-haul drivers onto the contractors’ vans.
A load chart, prepared by each van’s driver, designates where,
within the van, packages should be placed; this direction may
be supplemented by oral instructions given either directly to
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 860
loaders, or to the loaders through the loaders’ supervisor. Driv-
ers usually arrive at the terminal, and leave to make their deliv-
eries, between about 6 to 8 a.m., depending when the loaders
finish with their vans. There is no required start time for con-
tractors. If a driver has not left his van in the terminal the prior
evening, and fails to bring it in before the loaders finish their
procedures, the driver must load the van himself.
After leaving the terminal, the driver delivers the just-loaded
packages in his primary service area. The entire geographic
area in which a contractor picks up and delivers packages is
termed his “primary service area.” A “core zone” is defined as
a geographic package delivery area identified by one or more
five-digit postal zip codes. A delivery area may, in practice,
also be defined by physical boundaries (roads or highways), or
other descriptive terms, such as Moreno Valley, March Air
Force Base, or a particular mall.
When the Ontario Terminal first came into existence, vast
primary service areas of San Bernardino and Riverside Coun-
ties were simply distributed among the available contractors.
There is no evidence that any contractor paid anything for his
area. As time passed, the available work—which means the
number of stops, and packages to be picked up and delivered—
increased beyond the ability of a single driver to successfully
handle without either adding a helper, or another driver and
van. RPS, therefore, made primary service areas progressively
smaller from a geographic perspective, but increased the den-
sity within areas for stops, pickups, and deliveries. After the
contractors signed the Agreement, a propriety interest was es-
tablished for each contractor’s primary service area. . . .
. . . .