S & W Motor Lines Inc.

National Labor Relations Board - Board Decisions

Dec 1, 1969

179 N.L.R.B. 784 (N.L.R.B. 1969)

784 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
S & W Motor Lines Inc. and Chauffeurs, Teamsters
& Helpers Local Union No. 391, affiliated with
International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America. Case 11-UC-8
December 1, 1969
DECISION AND ORDER
BY MEMBERS FANNING, BROWN, AND ZAGORIA
Upon a petition for clarification of unit duly filed
by S & W Motor Lines, Inc. on May 8, 1969, a
hearing was held on June 3, and July 2, 1969 before
George A. Lawson, Hearing Officer of the National
Labor Relations Board. On July 22, 1969, the
Regional Director for Region II issued an Order
transferring the case to the Board for decision.
Thereafter, briefs were timely filed by the Petitioner
and the Union.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. They are hereby
affirmed.
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act, and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The Union involved herein is a labor
organization within the meaning of the Act and
claims to represent certain employees of the
Employer.
3. The Employer is a North Carolina corporation
engaged in handling freight in North Carolina and
other States. It is a certificated carrier operating
under Interstate Commerce Commission (ICC) and
various State certificates of convenience and
necessity. The Union pursuant to a Board
certification represents "all drivers, warehousemen,
mechanics and regular part-time employees
employed at the Employer's terminal in Greensboro,
North Carolina and subterminals in Hickory, North
Carolina, Nitro, West Virginia, and St. Albans,
West Virginia, excluding all office clerical
employees, guards, and supervisors as defined in the
Act."'
The Employer is not a general commodity carrier,
but operates only on limited rights which allow it to
haul furniture north and to return with loads of yarn
and grain. There are approximately 130 drivers who
operate tractors owned by the Company; their
employee status is not in issue. In addition, ten
'Case I1-RC-2474, not reported in printed volumes of Board decisions
drivers own their own tractors and lease them to the
Company, and one individual owns five tractors
which he leases to the Company. Leased vehicles are
driven by their owner or drivers furnished by them.
In this proceeding, the Employer-Petitioner is
seeking clarification of the bargaining unit by the
specific exclusion of lease operators whom the
Union seeks to include in the unit. The Employer
contends that these drivers are independent
contractors, who are not to be included.
The Employer began leasing operations in the
middle of 1968 as a temporary measure while it was
awaiting arrival of additional tractors it had
ordered. Lease drivers are not used as long as
regular drivers are available. Regular drivers are
compensated at a rate of 8 1/2 cents per mile. Lease
drivers receive 30 cents per mile, when actually
carrying cargo, but must pay for all gas, oil, and
repairs. If a lease driver returns to the terminal
empty he receives 14 cents per mile. Rates of
compensation for lease drivers are established by the
Employer.
The Employer adheres to the ICC regulations in
conducting lease operations in that each vehicle is
inspected by an employee of the Employer before it
is allowed to operate; all tractors bear the insignia
of the Employer on each door; each vehicle bears
the ICC number of the Employer; and each tractor
is assigned a fleet number by the Employer. The
only visible distinction between an Employer owned
tractor and a leased tractor is that the fleet number
for leased vehicles is a series of 7,000 while fleet
numbers of Employer owned vehicles run in the
series of 200, 300, 400, or 500.
The lease, signed by a driver before each trip,
covers a roundtrip from Greensboro, North
Carolina, to points in Pennsylvania, Ohio, or West
Virginia, and return. A lease driver is required to
post a $500 bond to cover damages to the
Employer's trailer. When a lease driver finishes his
delivery, he is required to call the Employer's
dispatcher for a return load. He is assigned his
return load after all regular drivers of the Employer
are dispatched.
The Employer urges that lease drivers should not
be considered regular employees and therefore
should be excluded from the unit, because the
Employer lacks sufficient control over the lease
drivers. Lease drivers are not given driver's tests;
they are responsible for their own repairs on their
vehicles; they are not told what time to leave the
terminal, only what time goods are to be delivered;
criminal records are not checked as they are for
regular drivers; lease drivers do not attend the
periodic safety meetings required of regular drivers;
no personnel files are maintained on lease drivers;
and they do not fill out applications for work. Lease
drivers are not covered by the Employer's
Workmen's Compensation Insurance or
Unemployment Compensation Plan. They are not
required to report traffic violations unless an
179 NLRB No. 136
S & W MOTOR LINES INC.
accident is involved. They have no checkpoints or
specific routes to follow. They are not instructed
where to purchase gas. They are not checked by the
three road supervisors of the Employer. They are
not furnished motel lodging. They receive no
disciplinary warning letters in their personnel file
since they have no personnel file. Lease drivers have
no seniority with the Employer, do not participate in
the group insurance program, receive no pay for
holidays, lodging, layovers, and delays, as do regular
drivers. They do not participate in the pension plan
or have paid vacations. Lease drivers are covered by
the Employer's liability insurance only when hauling
the Employer's trailer.
The Employer acknowledges that ICC regulations
require that lease drivers operating under the freight
rights of the Employer must be under some control
of the Employer. Thus lease drivers cannot haul
anything other than the furniture and grain the
Employer is allowed to haul. Lease drivers must
follow ICC regulations and furnish log books to
show that ICC rules as to the number of hours
driven and rest periods taken have been followed.
The Employer contends that this is the extent of
control that it has over the lease drivers and this
control is too minimal to allow the lease drivers to
be considered as regular employees, relying on
Board cases2 and ICC and Department of
Transportation (DOT) regulations.
The Union argues that the Employer exercises
sufficient control over the owner-operators to
warrant their being considered employees rather
than independent contractors. ICC regulations
require that "motor carriers will have full direction
and control of such vehicles and will be fully
responsible for the operation thereof. . . as if they
were the owners of such vehicles ."' The lease
document itself does not reflect any intention by the
parties to consider the lease drivers independent
contractors, and the usual disclaimer that the lease
drivers are not employees of the Employer is absent.
The leases used by the Employer are not "trip
leases" as that term is usually understood in the
industry because the lease covers the return trip
instead of only a one-way haul. The relationship
between the employer and lease driver is unbroken
between leases, since the lessor does not surrender
the license plates at the end of each round trip, nor
remove the S & W decal from each door. The
vehicles are not marked "leased to S & W." The
dispatcher calls the owner-operator when a load is
ready, indicating that the Employer assumes the
relationship is a continuing one. Lessors are not
paid at the end of each trip, but anywhere between
every two trips and every 2 weeks. The method and
amount of compensation in unilaterally fixed by the
Employer as is the $500 maintained in an escrow
account. The dispatcher calls the owner-operator for
'Deaton Truck Lines, 143 NLRB 1372, Indiana Refrigerator Lines. 157
NLRB 539, Chemical Leaman Tank Lines, 146 NLRB 148, Steel City
Transport. Inc. 166 NLRB No. 54.
785
a trip; there is no evidence that the owner has a
right of refusal. The leased vehicle must pass an
inspection before every trip and the Employer can
refuse to allow the vehicle to leave on the trip.
Safety supervisors can stop a lease driver engaged in
improper conduct and report this to the home
terminal. Lease drivers must report all accidents,
turn in logs and sign in on the special board to
indicate destination and time of return. The lease
provides that the Employer may cancel if the lessor
fails to operate his own equipment to the
satisfaction of the lessee.
In determining whether or not lease operators
(owner-drivers or nonowner drivers) are employees
rather than independent contractors, the Board
applies the common law "right of control" test.4
Under this test, the employer-employee relationship
exists when the employer reserves the right to
control not only the ends to be achieved, but also
the means to be used in reaching such ends.
However, the Board has made it clear that the
application of the test is not a "perfunctory
exercise" but demands a balancing of all the
evidence relevant to the relationship.'
The following factors, we believe, establish
sufficient control by the Employer over the
operations of the owner-drivers and support the
conclusion that they are employees of the Employer:
(1) The overall effect of the ICC regulations
requires extensive employer control over the lessors,
the drivers, and the leased equipment; (2) the lease
provides for the Employer's exclusive possession,
control, and use of the leased equipment; (3) the
Employer assigns loads with detailed instructions as
to delivery and requires the furnishing of daily log
sheets; (4) on return trips owners are not permitted
to solicit or obtain return loads without the approval
of the Employer, and the Employer generally
furnishes the owners return loads; (5) the lease is in
fact terminable at the will of the Employer; (6)
compensation for the owner is unilaterally
determined by the Employer on the basis of a
predetermined rate schedule which is accepted by
the owner without question; (7) owners are in fact
covered by the Employer's master insurance policy;
(8) the Employer, without written authorization,
withholds a portion of the owner's gross earnings to
insure payment of the latter's security deposit.
In view of the foregoing and on the basis of the
entire record, we find that the owner-drivers and
nonowner-drivers are employees of the Employer
within the meaning of the Act. Although we are
satisfied that the multiple owner-driver is not an
independent contractor under the common law test,
an issue arises as to whether he is a supervisor
within the meaning of the Act. The record shows
that he has and exercises the power to hire drivers
and to discharge them. We are satisfied that the
149 U.S C Sec 304 (e)
'National Freight , Inc, 146 NLRB 144, 145-146
'Indiana Refrigerator Lines Inc, 157 NLRB 539
786 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
foregoing supervisory authority is exercised not only
for the purpose of protecting the equipment
involved, but also as an integral part of the
Employer's business operations . In these
circumstances and especially as the multiple
owner-driver has effective authority with respect to
the tenure of nonowner-drivers whom we have found
to be employees of the Employer, we find that the
multiple owner-driver is a supervisor within the
meaning of the Act.' Accordingly, we shall exclude
him from the unit.
In view of the above, we find that owner-drivers
and nonowner-drivers of leased equipment are
properly with the unit represented by Local 391 and
that multiple owner-drivers should not be included
in the unit as they are supervisors within the
meaning of the Act. We shall therefore clarify the
unit accordingly.
ORDER
IT IS HEREBY ORDERED that Petitioner ' s request
for clarification be granted , and the unit represented
by Chauffeurs , Teamsters & Helpers Local Union
No. 391 is hereby clarified by specifically including
therein owner-drivers and nonowner-drivers of
leased equipment and excluding multiple -owners of
leased equipment.
'Member Brown agrees that the owner -drivers and nonowner-drivers are
employees but disagrees that the multiple owner-driver is a supervisor He
finds that the record clearly indicates that the multiple owner-driver is
subject to the same degree and manner of control by the Employer over
the means as well as the result of the work as nonowner-drivers and shares
the same community of interest and working conditions The multiple
owner-driver is an employee rather than a supervisor for, in his opinion,
the direction and authority he exercises over drivers of leased equipment
are for the protection of the leased property and are not in the interest of
the Employer