Standard Oil Co.Download PDFNational Labor Relations Board - Board DecisionsJul 19, 1977230 N.L.R.B. 967 (N.L.R.B. 1977) Copy Citation 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 Copy with citationCopy as parenthetical citation