Standard Oil Co.

National Labor Relations Board - Board Decisions

Jul 19, 1977

230 N.L.R.B. 967 (N.L.R.B. 1977)

STANDARD OIL COMPANY
Standard Oil CompanyI and Tank Truck Drivers
Independent Union, Inc., Petitioner. Case 9-RC-
10862
July 19, 1977
DECISION AND DIRECTION OF
ELECTION
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a
hearing was held on December 2, 3, and 4, 1974,
before Hearing Officer Earl L. Ledford. Following
the hearing and pursuant to Section 102.67 of the
National Labor Relations Board Rules and Regula-
tions and Statements of Procedure, Series 8, as
amended, and by direction of the Regional Director
for Region 9, this case was transferred to the
National Labor Relations Board for decision. There-
after, the Employer (hereinafter also called the
Company) and Petitioner filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that no
prejudicial error was committed. His rulings are
hereby affirmed.
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act, and it will effectuate the
policies of the Act to assert jurisdiction herein.
2. The Petitioner claims to represent certain
employees of the Company. 2
3. A question affecting commerce exists concern-
ing the representation of employees of the Company
within the meaning of the Act.
4. Petitioner seeks to represent a unit of all single
tank truck owner-distributors (hereinafter "commis-
I The name of the Employer appears as amended at the hearing.
2 The Employer contends that Petitioner is not a labor organization
under Sec. 2(5) of the Act inasmuch as art. III of its constitution limits its
membership to the "distributors for Standard Oil Company of Ohio" who,
the Employer claims, are not "employees" within the meaning of the Act. In
view of our findings that the distributors herein are employees, we reject the
Employer's contention as lacking in merit.
The Employer challenges Petitioner's status as a labor organization on
the additional grounds that (I) it does not admit to membership employees
of multitruck owner-distributors, (2) the nonowner drivers have shown no
interest in representation by Petitioner, and (3) Petitioner's current president
(Ronald Cook) is a multitruck owner-distributor who, according to
Petitioner's own contentions (discussed infra), is a supervisor. We also reject
these contentions as lacking in merit. As to ( I ), above, we find irrelevant the
fact that Petitioner does not now admit into membership the nonowner
drivers of multitruck owner-distributors inasmuch as Petitioner has clearly
230 NLRB No. 137
sion drivers" or "distributors") who distribute the
Employer's products in the State of Ohio. Petitioner
would exclude multitruck owner-distributors as
supervisors. Petitioner also would exclude all drivers
employed by such multitruck owner-distributors, but
expressed willingness to represent these drivers if
they perform driving functions on a regular basis.
The Employer, on the other hand, contends that the
unit sought is inappropriate because the distributors
are independent contractors and the drivers hired by
them are employees of the distributors rather than of
the Employer. If the Board disagrees with this
contention and finds that the distributors are
employees rather than independent contractors, the
Employer contends that a divisionwide unit of such
employees should be found appropriate. Petitioner,
as stated, contends that a statewide unit should be
found appropriate, but is willing to represent the
employees in any unit which the Board finds
appropriate.
The Employer is an Ohio corporation engaged in
the production, refining, transportation, sale, and
distribution of petroleum products. It operates in
Ohio under the name Sohio and markets its products
outside Ohio through Boron, a wholly owned
subsidiary, under the Boron label. The Employer's
marketing department consists of 5 regions, which
are divided into 11 sales divisions. Nine of the
divisions are located in Ohio while the remaining two
are located in adjacent States.
The Employer distributes its products and services
its customers with its own hourly paid drivers and
with the truck owner-distributors. The hourly paid
company drivers work out of large terminals oper-
ated by Employer's personnel. They drive company-
owned trucks and service customers having fuel
storage capacities of 3,000 gallons or more. Petitioner
does not seek to represent these individuals.3
The distributors whom Petitioner seeks to repre-
sent, on the other hand, drive their own trucks and
are compensated by the Employer on a commission
basis. They generally haul out of Employer-owned
expressed a willingness to represent these employees if the Board includes
them in the unit. We also find irrelevant the issue of whether the nonowner
drivers have expressed interest in being represented by Petitioner. It suffices
that Petitioner has submitted an adequate showing of interest to support its
petition. Finally, we deem irrelevant the fact that Petitioner's current
president is a multitruck owner-distributor and, therefore, potentially
outside the unit as a supervisor. Whether the current president is in fact a
supervisor is still speculative. See discussion, infra However, if it is
determined at a later date that multitruck owner-distributors, either
individually or as a class, are supervisors within the meaning of the Act, they
will be excluded from the unit on that basis. And, if Petitioner is certified as
the bargaining representative of a unit of employees, and if supervisors
thereafter remain in leadership positions within the Union. an appropriate
motion may be filed to revoke Petitioner's certification.
3 The hourly paid drivers operating out of some of the Employer's
distribution and maintenance areas are represented by independent unions.
967
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
"bulk plants" and normally service customers with a
fuel storage capacity of 3,000 gallons or less.
The relationship between the Employer and the
distributors is based on the terms of a uniform
"distributor agreement" separately executed by the
Company and each of the distributors. The present
agreement, drafted by the Company, provides that
the distributor is not an employee of the Company
and is engaged in an independent business. The
Company contends that by the provisions of this
agreement and the practices thereunder the distribu-
tors are independent contractors and not employees.
In support of its contention that the commission
drivers are independent contractors and not employ-
ees, the Company argues that the Board is required
to apply the common law "right to control" test and
that, under this test, an employer-employee relation-
ship exists when the employer reserves to itself the
right to control both the manner and means by which
specified results are to be accomplished. On the other
hand, an independent contractor relationship exists
when the "employer" retains control only over the
results to be accomplished. Asserting that the
Company exercises little or no control over the
means by which the distributors perform their
services, that the distributors operate on a profit
basis with considerable opportunity to influence their
earnings by their own entrepreneurial efforts, and
that the Company exercises virtually no control or
supervision over the distributor's day-to-day activi-
ties, the Company urges that the commission drivers
sought to be represented by Petitioner are indepen-
dent contractors under the "right to control" test.4
We disagree with the Company's argument and
believe that its conclusion rests on a reading of the
so-called "right to control" test which mistakenly
emphasizes minor details of the day-to-day perfor-
mance of the Company's work by the commission
drivers and minimizes important aspects of the
arrangement between 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 employment relationship
exists. It should be noted that, although 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 Publications,
Incorporated, 322 U.S. 111 (1944), requires applica-
tion of the common law agency test in determining
who are employees under the National Labor
Relations Act, it nowhere mentions the "right to
control" test, apparently preferring to rely on specific
considerations frequently mentioned with the "right
4 Petitioner seeks to represent only the commission drivers who own and
operate a single truck.
to control" test in determining whether an employ-
ment or an independent contractor relationship
exists. A number of such factors which are often
considered significant and sometimes controlling at
common law are present in this case and clearly
indicate that the commission drivers are employees
of the Company. Moreover, even under a more literal
application of the "right to control" test, there is
sufficient detailed control of their activities to
constitute them employees.
Among factors considered significant at common
law in connection with the "right to control" test in
determining whether an employment relationship
exists are (1) whether individuals perform functions
that are an essential part of the Company's normal
operation or operate an independent business; (2)
whether they have a permanent working arrange-
ment with the Company which will ordinarily
continue as long as performance is satisfactory; (3)
whether they do business in the Company's name
with assistance and guidance from the Company's
personnel and ordinarily sell only the Company's
products; (4) whether the agreement which contains
the terms and conditions under which they operate is
promulgated and changed unilaterally by the Com-
pany; (5) whether they account to the Company for
the funds they collect under a regular reporting
procedure prescribed by the Company; (6) whether
particular skills are required for the operations
subject to the contract; (7) whether they have a
proprietary interest in the work in which they are
engaged; and (8) whether they have the opportunity
to make decisions which involve risks taken by the
independent businessman which may result in profit
or loss. See N.LR.B. v. United Insurance Co., 390
U.S. 254, 259 (1968); N.L.R.B. v. Pepsi Cola Bottling
Co. of Mansfield, Ohio, 455 F.2d 1134, 1141 (C.A. 6,
1972); Restatement (Second) Agency §220(2) (1958).
I. The commission drivers are an integral
part of the Company's business under its
substantial control
In assessing whether the commission drivers are
engaged in independent businesses as independent
contractors or are employees, a significant consider-
ation, as indicated by a number of the foregoing
factors, is the fact that they constitute an integral
part of the Company's business in that almost all of
them devote virtually all of their working time on a
continuous basis to the delivery of the Company's
products to the Company's customers. So many
aspects of their performance of this distribution
function are fixed by the Company that, on balance,
968
STANDARD OIL COMPANY
regardless of their freedom from supervision in some
areas, the manner and means by which the results are
accomplished are under the Company's control.
As previously noted, the distribution of petroleum
products with respect to customers having a fuel
storage capacity of less than 3,000 gallons is
performed by the commission drivers involved here
who also operate the Company-owned buildings and
storage tanks which comprise the bulk plants.5 Fuel
is delivered from these bulk plants in Company-
owned tanks hauled by driver-owned trucks.6 The
commission drivers are responsible for keeping the
bulk plants well stocked, maintaining an inventory of
the products on hand, and performing general
cleaning and maintenance duties. The commission
drivers who operate bulk plants receive, in addition
to their sales commissions as drivers, a monthly
allowance to compensate them both for these
additional duties and for the expenses incurred in
operating the Company's bulk plants. The amount of
the monthly allowance is fixed by the Company,
varies with the number of trucks operating out of the
bulk station, and is not negotiable. The commission
drivers receive voluminous and detailed instructions
from the Company concerning every aspect of the
operation of the bulk plants and make numerous
reports to the Company, including a daily inventory,
weekly meter reading, and monthly bulk station
inventory. Although the trucks are owned by the
drivers, the specifications for them are furnished by
the Company to make certain that they are capable
of handling the tanks owned by the Company in
which the fuel is hauled. The trucks owned by the
drivers, as well as the tanks owned by the Company,
are required to be painted in the Company's colors
and to display the company label. The commission
driver's name also appears on the truck as distribu-
tor.
The terms and conditions under which the bulk
station and tank truck drivers carry out the Compa-
ny's distribution functions with respect to its under-
3,000-gallon-tank-capacity customers are fixed by
the Company under an identical distributor agree-
ment with all 311 drivers, which they are required to
' In the State of Ohio, there are 311 distributors who service customers of
the Company having a fuel tank capacity of less than 3,000 gallons.
Approximately one-half(149 of 31 I) of the distributors within Ohio operate
the bulk stations from which they obtain the Company's products which
they deliver. The 311 distributors within Ohio include 247 single-truck
owner-distributors. 62 multitruck owner-distributors, and 2 bulk station
distributors who do not operate trucks.
6 In at least one division, some of the commission drivers operate out of a
Company-operated terminal.
7 The insubstantiality of the Company's claim that the commission
drivers are independent businessmen is illustrated by the tactics employed
to put the new agreement into effect. The representation petition was filed
on November 8. 1974. According to the Company's brief, "A new form of
distributor agreement was instituted by the Company during the first part of
November 1974 and was signed by Company representatives and the
sign if they wish to continue as drivers for the
Company. The present agreement was executed
shortly after Petitioner filed its petition herein. Under
this agreement, the Company designates the driver to
sell company products in an "area of primary
responsibility" but purports to allow the driver to
solicit business in adjacent areas. This provision in
the new agreement appears to have been formulated
to buttress the Company's claim that the drivers are
independent businessmen. Under the prior agree-
ment, drivers were restricted to territories unilaterally
designated by the Company. The Company had the
authority to modify the territorial boundaries with-
out prior consultation with the drivers affected.
Under the new agreement which the Company
required the drivers to sign, without affording them
an opportunity to study and consider, and at the risk
of otherwise losing their routes, the drivers retain
responsibility for their assigned areas and the
Company retains the power to designate those
areas. 7 There is no evidence that it is feasible for the
drivers to solicit new accounts outside their areas of
primary responsibility or that any have done so. The
new contract specifically states that the Company
may designate territories orally or in writing. In
practical effect, therefore, the commission drivers
operate in territories fixed by the Company.
Under the terms of the agreement, the Company
decides on the products to be supplied to the drivers,
retains title to all the products until they are sold,
establishes the prices for the products, and sets the
commission rates to be remitted to the drivers. The
Company reserves the right to change commission
rates payable to the drivers on 30 days' notice. The
agreement reserves to the Company the right to
change, discontinue, or add to its existing line of
products, and to sell and deliver directly to custom-
ers located within the commission driver's area of
primary responsibility without paying any commis-
sion to the drivers. Although the commission drivers
may choose their own method of scheduling deliver-
ies, the Company encourages use of the "degree
system." Under this system, the fuel needs of a
consumer are determined by a company computer
individual distributors during November 1974." The testimony of the
commission drivers makes clear that they were presented the new agreement
on a take-it-or-leave-it basis. One driver testified. for example, that when
presented with the new agreement he stated that he wanted "to take it home
and study it and to digest it." He was told that if he did not "sign it right
then" it would be assumed that he was not "interested in being a Sohio
distributor." When another driver said, "I would like to have my attorney
read this before I sign it," the reply was "In other words, you are terminating
your distributorship?" After another driver signed the new agreement "Seen,
but not approved," he was handed a pencil and advised "Sign the contract
or your distributorship is terminated today." Other drivers testified to the
same effect. A driver who is refused permission to study or consult an
attorney with respect to the basic agreement can hardly be considered an
independent contractor.
969
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on the basis of outdoor temperatures. The Company
makes the temperature data available to commission
drivers who wish to follow that system. It appears
that the Company requested the commission drivers
in the Dayton division to follow the degree system.
The Company offers, at the customer's option, an
automatic delivery program whereby it guarantees
timely delivery of fuel and promises to pay for the
customer's burner service if delivery is not timely
made. The record shows that under this program the
Company deducts any customer's burner service
costs from the driver's commission.
The agreement requires drivers to make daily sales
reports to the Company, to make daily remittance of
all sales proceeds, and to furnish the Company with
all relevant data regarding their cusotmers. All such
reporting and accounting is required to be done on
forms furnished by the Company which also reserves
the right to inspect the drivers' books. The commis-
sion drivers are authorized to use the words "Distrib-
utor-Standard Oil Company (OHIO)" on their
stationery, delivery tickets, and equipment. The
Company decides which customers may be sold the
Company's products on credit, extends its own credit
to these customers, and handles the billing for credit
customers through a centralized computer system.
The driver is penalized for extending credit to
customers other than those approved by the Compa-
ny by having any losses deducted from his commis-
sion check. 8
The commission drivers have received directives
from the Company relating to prompt reporting, with
a manual stating that "too much reporting is better
than too little." They have been advised that changes
in procedures or equipment are not permitted unless
authorized by the Company's maintenance officials
and that modification or adjustment of equipment
should not be attempted. They have received detailed
instructions on the procedure for loading, pumping
out tanks, and other matters.
Commission drivers are required to attend weekly
meetings with the Company's sales managers. At
these meetings, the sales managers discuss customers'
complaints against the drivers, help distributors with
any problems they may have, and help them
complete the various forms and accounting records
required by the Company. In some regions, the
Company maintains sales centers where customers
can place fuel orders which are relayed to the
I The Company regards this as an example of driver control supporting
an independent contractor conclusion, stating euphemistically that they
"are free to extend credit to customers at their own risk." We do not so
regard it.
9 Since drivers operate under the company name, customers in their
areas would naturally contact them to order fuel. The fact that drivers may
obtain a large number of fuel orders is therefore no evidence, as the
Company claims. of entrepreneurial endeavors. The customers, who are
appropriate area distributor in the form of dispatch
orders.9 There is also evidence that the Company
requests commission drivers to make emergency
deliveries to customers who are normally serviced by
the Company's hourly paid drivers.
It seems clear from the foregoing that, rather than
being engaged in businesses of their own, the
commission drivers are an integral part of the
Company's business in the distribution of fuel to
customers whose storage capacity is less than 3,000
gallons and that the essential terms and conditions
and virtually all details of this distribution arrange-
ment, in other words, the manner and means by
which the results are accomplished, are controlled by
the Company.' 0 In N.L.R.B. v. United Insurance Co.,
supra, the Supreme Court in finding an employment
relation stated that "the decisive factors in these
cases become the following: the agents do not
operate their independent businesses, but perform
functions that are an essential part of the company's
normal operations." The Court went on to list other
factors which are discussed later. 390 U.S. at 259.
2. Commission drivers have no substantial
proprietary interest in the distribution
function they perform
The conclusion that the commission drivers are
employees is also supported by the fact that they
have no substantial proprietary interest in the
distribution of the Company's products in their
assigned territory. Their investments in their individ-
ual trucks may be substantial." But it must be
remembered that the bulk plants which the commis-
sion drivers operate for the Company to provide the
fuel which they deliver are owned entirely by the
Company and that the tanks in which the commis-
sion drivers haul fuel to the Company's customers
are furnished by the Company. But even the
proprietary interest of the drivers in their trucks is
limited. The Company may terminate a driver's
contract without cause upon 30 days' notice and at
any time if the driver fails to perform any material
contract obligation. Upon such termination, the
driver does not have authority to sell his personally
owned truck as he sees fit but, under the distributor
agreement, must grant the Company the first option
to purchase it. Since the Company presumably does
not wish to lose its customers in the assigned
territory, its right to purchase the driver's truck
billed directly by the Company. would undoubtedly be suprised if advised
that they were customers of the driver rather than of the Company.
iO See Land O' Lakes, Inc., 204 NLRB 519 (1973); Lorenz-Schneider Co,
Inc., 203 NLRB 217 (1973).
u The present cost of buying and fully equipping the truck is said to be
as much as $16,000. The Company has assisted with the financing of the
commission drivers.
970
STANDARD OIL COMPANY
undoubtedly safeguards the driver against any
entrepreneurial risk in his investment.
The commission driver's proprietary interest in the
distribution of fuel to customers in his assigned
territory is further limited by the Company's right,
spelled out in the agreement, to designate the areas of
primary responsibility either orally or in writing. The
record shows that in the past the Company has
modified the boundaries of commission drivers'
territories without prior consultation with those
affected. Although a driver may enhance his commis-
sion income by increasing his accounts, he does not
retain an independent businessman's proprietary
interest in these accounts. Under the terms of their
agreement, the drivers have no proprietary interest in
their routes and are expressly prohibited from
assigning their rights. The customers who, as indicat-
ed, are approved for credit by the Company and
billed by the Company are obviously the Company's
customers and not the drivers'. The absence of any
real potentiality for developing a proprietary interest
in the distribution function is clearly more consistent
with an employment, than with an independent
contractor, relationship.
3. Commission drivers have no significant
entrepreneurial opportunity
Similarly, the commission drivers' limited opportu-
nities to take risks and influence their profits by their
own business decisions are more consistent with an
employment, than with an independent contractor,
relationship. The significant business decisions are
made by the Company, not by the drivers. An
important limitation on a commission driver's
business discretion is the Company's restriction of
his deliveries to customers having a fuel capacity of
less than 3,000 gallons. To be sure, a commission
driver may increase his income by soliciting new
accounts. But the ability to increase earnings through
commission sales is not a significant indication of an
independent contractor. Commission salesmen are
generally treated as employees. In N.L.R.B. v. United
Insurance Co., supra, for example, which involved the
status of certain insurance agents as employees of the
insurance company or as independent contractors,
the Supreme Court did not regard the fact that the
agents were compensated on a commission basis and
could increase their earnings by sales of new life
insurance as negating an employment relation or as a
significant indicator of independent contractor sta-
tus. Moreover, the customers served by the commis-
sion drivers are largely furnished by the Company.
And, as previously noted, new customers obtained by
the drivers probably result from the drivers' being
designated the Company's representatives in their
assigned territories rather than from their indepen-
dent solicitation efforts. There is no indication to the
contrary in the record here.
The commission drivers' gross earnings are deter-
mined entirely by the commissions they receive from
the distribution of the Company's products and the
fees paid to the operators of the Company's bulk
stations. The sales commissions are unilaterally
determined by the Company and are uniform for all
distributors. They are also subject to unilateral
change by the Company. The fees for the operation
of the bulk stations are also fixed by the Company
but vary with the amount of work involved in the
operation of the particular bulk station. Since the
commission drivers are compensated solely on a
commission basis, they have no opportunity to make
the ordinary decisions of independent businessmen
with respect to the time, place, quantity, and price of
purchase of the products they distribute. They have
nothing to do with determining the price at which the
products are sold to the purchasers. All these
decisions are controlled by the Company. The
territorial areas for which they are responsible, and
to which they are in practical effect limited in their
operations, are determined by the Company. They
are restricted in the sales of competitive products. It
thus appears that all meaningful decisions of an
entrepreneurial nature which affect profit or risk of
loss are controlled by the Company.
The Company argues for a contrary conclusion,
relying in part on the fact that the commission
drivers must pay out of their commissions for fuel,
repairs, license fees, insurance, and other operating
costs. It seems clear, however, that these costs are
more or less standardized, are taken into account by
the Company when it determines the commission it
will pay, and provide no significant opportunity to
commission drivers for influencing their profits or
losses.
4. Control with respect to minor factors is
not relevant to determination of employment
relationship
What has been said above discloses the lack of
merit in the Company's claim that the commission
drivers are independent contractors because they are
independent businessmen operating on a profit basis.
To support this position, the Company also relies on
other factors equally lacking in significance and
substance.
The attempt to fortify the independent contractor
argument by pointing to the limited control or
supervision over the distributor's day-to-day work
schedules and vacations does not measurably
strengthen the Company's position. Such work
971
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
schedules are largely, perhaps wholly, set by the
demands of the customers rather than by an
independent judgment of the drivers; nothing in the
record indicates, for example, that the drivers were
free to close down for a 2-week vacation in
midwinter, and the Company's requirement of daily
sales reports would enable it to take prompt action if
such conduct occurred. In N.L.R.B. v. United
Insurance Co., supra, the fact that the agents there
involved "perform their work primarily away from
the company's offices and fix their own hours of
work and work days" did not preclude the Supreme
Court from holding that they were nevertheless
employees of the company.
The Company also points to the absence of
requirements that the drivers wear the available
company uniforms, be subjected to company safety
inspections, and undergo company physical exami-
nations as indicating an employment relation does
not exist. But the vast majority of employees in the
nation do not wear uniforms; truck safety require-
ments and inspections are established and adminis-
tered by governmental agencies, not by employers;
and many, perhaps most, employees in the nation are
not subject to employer physical examinations. The
presence of these details might be strong evidence of
an employment relationship, but little meaning can
be derived from their absence.
The Company also relies on the drivers' freedom to
park the trucks where they wish, and to determine
their routes and sequence of deliveries, as showing
the drivers are not employees. But these are hardly
significant indicators of entrepreneurial activity or
controlling the means of performance. Parking
company vehicles is frequently left to employees
driving them as a matter of mutual convenience.
Much the same is true of deciding which routes to
take and what order the deliveries should follow; for
a rational driver, these decisions are mainly or wholly
dictated by the location of customers who need
delivery that day and the amounts they need. Such
"decisions" are made every day by deliverymen
whose employment status is never questioned and
involve little if any independent judgment.
Lack of evidence of any discipline of the drivers by
the Company is regarded as a further indication that
the drivers are not employees. But the absence of
such discipline is meaningless in the absence of
evidence that events occurred which normally would
have led to some type of discipline. The Company
reserved the right to terminate the relation without
notice for cause. The threat of termination by the
Company is real and immediate when the drivers
12 The above are five of the seven factors listed by the Supreme Court as
determinative of an employment relationship. The two not listed above are
deviate very far from the Company's desires or the
limits it imposes, as demonstrated by the Company's
prompt and repeated threats to terminate drivers
who were reluctant to sign the new agreement
imposed by the Company when the Union entered
the scene, as noted earlier. In such circumstances,
any absence of lesser forms of discipline which can
be identified proves little.
5. Conclusion
In light of the complete integration of the commis-
sion drivers into the Company's system for the
distribution of its products under terms controlled by
the Company in the distributor agreement which is
identical for all commission drivers, the absence of a
meaningful proprietary interest in the distribution
function which the commission drivers perform, and
the lack of a significant entreprenurial interest
because of the extremely limited area in which the
drivers may influence their profits, it is clear that,
unlike the genuinely independent businessman, the
drivers' earnings do not depend 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. Their
earnings depend almost entirely on the sufficiency of
the commission fixed by the Company to cover the
predictable operating expenses of the distribution of
the Company's products and leave some overage as
compensation for the commission drivers.
Among "the decisive factors" "assessed in light of
the pertinent common-law agency principles" which
the Supreme Court in the United Insurance Co. case
held indicative of an employment relationship are the
following which are paralleled in the present case. In
concluding that the agents were employees, the
Supreme Court noted that (1) "the agents do not
operate their own independent businesses, but
perform functions that are an essential part of the
company's normal operation"; (2) "they do business
in the company's name with considerable assistance
and guidance from the company and its managerial
personnel and ordinarily sell only the company's
policies"; (3) the agent's agreement "that contains
the terms and conditions under which they operate is
promulgated and changed unilaterally by the compa-
ny"; (4) "the agents account to the company for the
funds they collect under an elaborate and regular
reporting procedure"; (5) "the agents have a perma-
nent working arrangement with the company under
which they may continue as long as their perfor-
mance is satisfactory." 1 2 Thus, considerable support
that the agents "need not have any prior training or experience, but are
trained by company supervisory personnel": and that they "receive the
972
STANDARD OIL COMPANY
for the conclusion that the single-truck own-
er/commission drivers are employees of the Compa-
ny, and we so find them to be, and not independent
contractors is furnished by the Supreme Court's
decision in this leading case on the question under
our Act.
Having found that the tank truck owner-distribu-
tors are employees within the meaning of the Act, we
turn to the status of the multitruck owner-distribu-
tors and their employees, and to the scope of the
appropriate unit.
Status of the Multitruck Owner-Distributors
and Their Employees
As stated, the Petitioner seeks to represent a unit of
all single tank truck owner-distributors who distrib-
ute the Employer's products in the State of Ohio.
Petitioner contends that the multitruck owner-distri-
butors are supervisors within the meaning of the
Section 2(11) of the Act and should therefore be
excluded from the unit. Petitioner also would exclude
all drivers employed by such distributors, but
expressed a willingness to represent these drivers if
they perform driving functions on a regular basis.
The Employer, on the other hand, contends that the
multitruck owner-distributors should not be excluded
as a class because the evidence fails to establish that
they are supervisors. The Employer also contends
that the driver-employees of the multitruck owner-
distributors should be excluded on the ground that
they are not employees of the Employer.
In cases where the Board has found that truck
owner-operators are employees rather than indepen-
dent contractors, the Board has also found that
multitruck owner-operators who hire and fire em-
ployees to operate their extra equipment are statuto-
ry supervisors of the employer vis-a-vis these drivers
and are, therefore, excluded from the bargaining
unit.1 3 By the same token, the nonowner drivers have
traditionally been included in a unit of owner-
operators.14
The record discloses that a certain number of the
Employer's distributors own more than one truck. It
also discloses that some of these multitruck owner-
distributors hire and compensate drivers to operate
these extra trucks, while others merely utilize their
additional vehicles as spares. There is also limited
evidence that some of the multitruck owner-distribu-
tors use family members or temporary employees as
benefits of the company's vacation plan and group insurance and pension
fund." In the present case, it does not appear that the training or expenence
of hourly paid drivers of tank trucks serving over-3,000-gallon-fuel-tank-
capacity customers (who are admitted by the Company to be its employees)
is any different from that of the commission drivers of the tank trucks
involved here. Also, the commission drivers may obtain health and hospital
insurance coverage through the Company at group rates but at their own
expense.
drivers. It is, therefore, not clear from the record
whether the multitrust owner-distributors hire drivers
to work on a regular basis or whether these
nonowner-drivers share a community of interest with
the owner-distributors in the unit. Accordingly, we
are unable to determine on this record whether the
multitruck owner-distributors are supervisors, or
whether the nonowner-drivers work on a sufficiently
regular basis and otherwise share a community of
interest with the owner-operators herein to warrant
their inclusion in the unit. Accordingly, we shall
permit the multitruck owner-distributors and their
employees to vote in the election subject to chal-
lenge.
The Scope of the Unit
Petitioner contends that a unit of owner-distribu-
tors who distribute the Employer's product in the
State of Ohio is appropriate. Alternatively, Petitioner
expressed willingness to represent these owner-distri-
butors in any unit the Board finds appropriate. The
Employer, on the other hand, contends that only a
divisionwide unit is appropriate. For the reasons
discussed below, we find the statewide unit is an
appropriate unit.
The Employer's marketing department, whose
headquarters are in Cleveland, Ohio, is responsible
for the distribution and marketing of Sohio and
Boron products. Its staff functions, such as account-
ing, payroll, and the processing of sales reports
submitted by the distributors, are centralized in the
Cleveland headquarters, where the Company main-
tains a central computer operation. The Employer's
distribution functions are conducted through five
regions, covering the State of Ohio and parts of
bordering States. The 5 regions in turn are comprised
of I I sales divisions, 9 of which are located within the
State of Ohio and distribute Sohio products, while 2
are in bordering States and distribute Boron prod-
ucts.15 Petitioner, in effect, seeks a single unit
consisting of the nine Ohio sales divisions, while the
Employer apparently contends that only separate
divisionwide units are appropriate.
Each of the five regions has a regional manager
and several operational departments, including a
distribution department. The latter, however, do not
include the owner-distributors. To the extent rele-
vant, the functions of the regions include, inter alia,
the processing of customer credit applications; the
13 Land O' Lakes, Inc., 204 NLRB 519 (1973).
14 Ibid
1s The marketing of products outside of Ohio under the Boron name is
the result of an antitrust decree which forced the breakup of the original
Standard Oil Company. Boron is a wholly owned subsidiary of the
Employer which does business outside the State of Ohio.
973
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
maintenance of a sales center which processes orders
from customers and service stations; the handling of
accounts payable and employee relations, including
labor relations; and the warehousing and distribu-
tion of bulk and package products to service stations,
large consumer customers, and secondary bulk
stations.
The 11 sales divisions are also similar in their
organizations, with the Dayton division being typi-
cal. That division is headed by a division manager
who has four persons reporting directly to him. Two
of these are retail managers who are responsible for
selling the Employer's products through service
stations in the Dayton sales area. The third is the
office coordinator, and the fourth is the consumer
sales manager. The latter is responsible for sales to
nonservice station customers. The consumer sales
manager in Dayton has five salesmen, two who call
on large industrial consumer accounts and three who
call on the owner-distributors here involved.
The consumer salesmen in each division are
responsible for the recruitment of distributors in their
divisions. They make the ultimate decision on
whether the Employer will contract with a potential
owner-distributor. Although they may consult with
the division manager, they do not consult with the
regional manager. Although the owner-distributors
make their sales and earnings reports to the Cleve-
land marketing department headquarters, their per-
sonnel files are kept in the division offices, and their
contacts with the Employer are primarily at this
level. Thus, the division personnel assist the owner-
distributors in soliciting new customers, filling out
the necessary reports, and resolving any problems
they might encounter. The record discloses that there
is little or no interchange between distributors
operating out of the several divisions. It also discloses
that, while the practice among the divisions varies
somewhat with respect to the issuance of written
instructions to the bulk station distributors, it
appears that all the divisions operate under substan-
tially similar procedures and that all of the distribu-
tors throughout the State of Ohio are subject to the
same safety, licensing, and operational requirements
and otherwise share substantially common interests.
In view of the foregoing, we agree with the
Employer that divisionwide units might well be
appropriate. Nevertheless, we disagree with its
contention that a statewide unit is inappropriate. The
statewide unit here is essentially an amalgamation of
the nine divisions located in the State of Ohio which
are responsible for distributing the Employer's Sohio
products in that State. Unlike the Employer, we
consider it significant that these nine divisions are
"' [Ercelsior footnote omitted from publication.]
the only sales divisions in which the Employer
markets and distributes its Sohio products. The two
remaining divisions of the marketing department,
located in Detroit and Pittsburgh, distribute the
products of a wholly owned subsidiary of the
Employer, Boron, under the Boron label. Thus, they
technically distribute the products of another em-
ployer. The Employer minimizes the importance of
this factor, arguing that "[i]t is substance and not
name which controls the Board's determination of
the appropriateness of a bargaining unit." We fully
adhere to the latter view, but we cannot subscribe to
the Employer's apparent view that the antitrust
decree which forced the breakup of the original
Standard Oil Company is but a hollow piece of
paper. We note that the Employer does not contend
that a departmentwide unit, including all 11 divisions
within the marketing department, is appropriate.
In sum, we find on the record before us that the
tank truck owner-distributors who distribute the
Employer's products in the State of Ohio share a
sufficient common interest in wages and working
conditions to warrant a finding that such a unit is
appropriate for purposes of collective bargaining.
Accordingly, we find that the following employees of
the Employer constitute a unit appropriate for the
purposes of collective bargaining within the meaning
of Section 9(b) of the Act:
All tank truck owner-distributors and their
regularly employed drivers who distribute the
Employer's products in the State of Ohio,
excluding all other employees, guards, and super-
visors as defined in the Act.
[Direction of Election omitted from publication.]' 6
MEMBER PENELLO, concurring:
I agree that the tank truck owner-distributors
whom Petitioner seeks to represent are employees
rather than independent contractors.
In so finding, I am mainly persuaded by the terms
of the agreement between the Employer and each of
the owner-distributors. The contract, as my col-
leagues have noted, defines an "area of primary
responsibility," in which the distributor solicits and
services customers for the Employer's products.
Under the agreement, the Employer retains title to its
products until they have been sold, fixes the retail
price of the products, and specifies the commission
rate to be paid to the distributors 7 Further, the
contract provides that the Employer reserves the
right to change, discontinue, or add products to its
line. The agreement, in addition, requires the
distributor to make daily sales reports to the
I7 The Company also has the power to change the rate of commission
upon 30 days' notice to the distributor.
974
STANDARD OIL COMPANY
Employer on forms provided by the Company, and
to make daily remittances for all sales.1 8 Finally, the
contract states that the Company has first option to
purchase the distributor's vehicle upon termination
of the contract, and explicitly prohibits the distribu-
tor from assigning his rights thereunder.
I also find to be significant evidence that the
Employer conducts mandatory weekly sales meetings
for its distributors, at which the Company's sales
managers help them fill out required forms, assist
them in soliciting new business, and discuss customer
complaints which have been received.
From the foregoing, I conclude that the services
provided by the owner-distributors are essential to
1' The Employer even reserves the right to inspect the distributor's
books,
the operation of the Employer's business, and that
the distributors have little or no economic latitude in
which to engage in genuine entrepreneurial activity.
Thus, I am of the opinion that the owner-distributors
function as sales and service representatives of the
Employer, who simply happen to be compensated by
means of fixed commission, rather than hourly wage
or weekly salary.
For the reasons stated in the majority opinion, I
would also vote the multitruck owner-distributors
and their employees subject to challenge in the
election, and I would find the statewide unit
requested by Petitioner to be appropriate.
975