Tarheel Coals, Inc.

National Labor Relations Board - Board Decisions

Dec 4, 1980

253 N.L.R.B. 563 (N.L.R.B. 1980)

TARHEE. COALS, INC.
Tarheel coals, Inc., Newcon Coals, Inc.; Sigmond
Enterprises, a Partnership; Bass Trucking a/k/a
Bass Transit, Inc.' and Perry County Coal
Haulers Association, Petitioner. Case 9-RC-
12939
December 4, 1980
DECISION AND DIRECTION
BY CHAIRMAN FANNING AND MEMBERS
PENII I.O AND TRUE-SDAIF
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Daniel J.
Roketenetz of the National Labor Relations Board
on June 28 and 29, 1979. Pursuant to Section
102.67 of the National Labor Relations Board
Rules and Regulations, Series 8, as amended, by di-
rection of the Regional Director for Region 9, this
case was transferred to Board for decision. There-
after the Employers and the Petitioner filed briefs.2
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional 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 they are
free from prejudicial error. They are hereby af-
firmed.
Upon the entire record in this proceeding, the
Board finds:
1. Tarheel Coals, Inc., a Kentucky corporation,
is engaged in the mining and sale of coal from its
Bulan, Kentucky, location and surrounding areas.
During the past 12 months, a representative period,
Tarheel mined and shipped coal directly or indi-
rectly in interstate commerce valued in excess of
$50,000. Newcon Coals, Inc., a Kentucky corpora-
tion, is engaged in the mining of coal for Sigmond
Enterprises, an employer engaged in interstate
commerce. During the past calendar year, a repre-
sentative period, Newcon derived revenues for its
services provided to Sigmond Enterprises valued in
excess of $50,000. Sigmond Enterprises, a Ken-
tucky partnership, is involved in the business of
leasing and purchasing coal at its Bulan, Kentucky,
location and surrounding areas. During the past
calendar year, a representative period, Sigmond
purchased coal for shipment directly in interstate
commerce having a value in excess of $50,000. Bass
Transit, Inc., a Kentucky corporation, has been en-
' At the hearing, the Petiltioner amended its petition hy deleting Sidd
Trucking as a named Employer
2 The Petitoner has requested oral argument This request is hereby
denied as the record and briefs adequately present the issues and the posi-
lions of the parties
253 NLRB No. 71
gaged in the business of providing transportation
services for the intrastate hauling of coal for em-
ployers engaged in interstate commerce; namely,
Tarheel Coals, Inc., Newcon Coals, Inc., and Sig-
mond Enterprises. During the past 12 months, a
representative period, Bass Transit, Inc., derived in
excess of $50,000 for services so provided. The
parties stipulated, and we find, that the above Em-
ployers are engaged in commerce within the mean-
ing of the Act. We further find that it will effectu-
ate the purposes of the Act to assert jurisdiction
herein.
2. The Employers have declined to stipulate that
the Petitioner is a labor organization within the
meaning of the Act. 4
3. No question affecting commerce exists con-
cerning the representation of employees of the Em-
ployers within the meaning of Section 9(c)(1) and
Section 2(6) and (7) of the Act.
4. The Petitioner seeks to represent a unit of in-
dividuals owning equipment utilized in hauling coal
for the above-named Employers in Perry County,
Kentucky, and surrounding areas. Petitioner seeks
to include in the unit all single truck owner opera-
tors and certain single truck owners who do not
operate their own equipment. The Petitioner does
not seek to represent multiple truck owners nor
does it seek to represent individuals operating
equipment that they do not own. The Employers
contend that the petition should be dismissed be-
cause the individuals whom the Petitioner seeks to
represent are independent contractors and are not
employees within the meaning of the Act. As set
forth below, we find that the record supports the
Employers' contentions, and accordingly we dis-
miss the petition.
Tarheel Coals is engaged primarily in the mining
of coal. In order to move coal from its mines to
tipples, where the coal is processed, Tarheel has
utilized a pool of approximately 30 trucks. The
trucks in the pool are capable of hauling heavy
loads (up to 60 tons of coal) over the rough terrain
between the mines ad the tipples. The mines vary
in distance from 5 to 25 miles from the tipples.
Some of the trucks are driven by owner-operators
a The Petitioner contends that the above-named Employers constitute
a single and/or joint employer for the purposes of collective bargaining
In addition, subsequent to the hearing. the Petitioner filed a motion to
amend the petition and name Lost Mountain Mining, Inc.. as a successor
to the above-named Employers The Employers denied that they are
single and/or joint employers, and Lost Mountain Mining. Inc., filed a
motion opposing the Petitioner's request to amend the petition. Further.
the parties raised a number of issues regarding the appropriateness of he
unit sought by the Petitioner In iew of the dismissal of the petition
based on our finding that the individuals whom the Petitioner seeks to
represent are independent contractors, we find it unnecessary to resolve
any of these issues
Ii iess f our dismissal of the petition, we find it unnecessar to
determine the Petitioner's status as a labor organization
563
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and some of the trucks are driven by nonowner-op-
erators. None of the Employers own any of the
trucks.
For a number of years Tarheel has had informal
oral agreements with each of the truck owners.
The oral agreements have been limited to an agree-
ment by Tarheel to compensate the truck owners
at a specified rate for hauling coal. The oral agree-
ments have not set forth any other terms or condi-
tions controlling the relationship between the haul-
ers and the Employers. The rate at which the haul-
ers have been compensated has been based on the
type of coal and the distance between the mines
and tipples multiplied by the total number of tons
hauled per truck. In June 1978, Tarheel contracted
with Bass Trucking to provide coal hauling serv-
ices. Bass contacted the truck owners and request-
ed them to sign a written contract. A number of
owners acquiesced and signed the agreement.
However, other owners refused to sign the agree-
ment. The record indicates that although Bass
began to remunerate the truck owners for the serv-
ices of their trucks, the truck owners continued to
haul coal pursuant to the preexisting oral agree-
ment with Tarheel whether or not an agreement
had been signed with Bass. For example, the writ-
ten agreements between Bass and some of the
owners require those owners to carry specified
amounts of liability insurance. In practice, howev-
er, Bass has not enforced this requirement and none
of the truck owners have been required to carry li-
ability insurance for their trucks.
None of the Employers have ever become in-
volved in the purchase or financing of any of the
trucks by the owners, and it is clear that the pur-
chase of coal hauling trucks involves a substantial
capital investment by the truck owners. The Em-
ployers maintain no requirements as to the type or
condition of equipment used to haul their coal, and
the Employers make no inspection of the vehicle.
The truck owners are entirely responsible for the
maintenance of their equipment and are responsible
for all repairs and for all fuel and oil used by the
trucks. The Employers have permitted the owners
to purchase fuel at a below-market price, but the
decision as to where fuel is purchased is entirely
within the owners' discretion. The Employers do
not require the owners to paint or mark their vehi-
cles in any particular manner and the trucks do not
carry any markings which indicate any identifica-
tion with the Employers.
As indicated earlier, some of the owners operate
their own equipment while other owners hire driv-
ers to operate their trucks. In addition, the owners
exercise the right to substitute a driver at any time,
and often the Employers do not know the identity
of the individual driving a truck. The Employers
do not become involved in the employment rela-
tionship between nonoperating owners and drivers,
and the owners unilaterally set the rates of com-
pensation and hire, fire, and discipline their drivers.
Regardless of who drives the truck, the Employ-
ers compensate the truck owners based on the
amount of coal hauled by the trucks. Unlike the
other classifications employed by the Employers,
the truck owners and/or drivers do not receive
sick pay, vacation pay, unemployment, insurance,
or any other fringe benefits. The Employers do not
withhold taxes or social security, provide no train-
ing, and keep no personnel files for the owners
and/or drivers. Although the Employers employ
individuals with similar skills and responsibilities
(rock truck drivers and operators of earth-moving
equipment), there has never been any interchange
between such individuals and the coal truck driv-
ers. 5
Originally, the Employers had no set schedule
for any of the trucks. Trucks were assigned loads
on a indiscriminate basis. Many of the truck
owners complained that this system was inequitable
and that some trucks were receiving a dispropor-
tionate share of profitable loads. Depending on the
type of coal and the distance from the mine to the
tipple, some loads are more profitable than other
loads. In addition, the Employers had an insuffi-
cient supply of available coal to keep all of the
trucks busy each day, and on a number of occa-
sions there was no work available when the trucks
showed up at the Employers' facilities. As a result,
several years ago, a number of truck owners re-
quested the Employers to devise a system that
would distribute the loads on a more equitable
basis and bring some order to the workplace. Ac-
cordingly, with the truck owners' approval, a
system was implemented whereby each truck is as-
signed a number and loads are scheduled on a nu-
merically rotating basis. The hauling schedule for
the next day is posted each evening at the Employ-
ers' office, and truck owners are able to determine
if their trucks are scheduled for hauling by calling
the Employers' office or by checking the list. The
truck owners, however, retain the right to refuse to
haul on any scheduled day. In order to facilitate
the scheduling of a replacement, the Employers re-
quest that they be notified if a truck is not available
for hauling on a scheduled day. Likewise, the Em-
ployers permit trucks to work a partial day; how-
' The Employers own the trucks utilized for hauling rock and also
own the earth-moving equipment.
564
TARHEEL COALS, INC.
ever, for scheduling purposes, the Employers re-
quest that they be informed in advance. 6
The Employers determine where the trucks will
be loaded and where the coal will be delivered.
The Employers also determine the times that the
loading of trucks will commence and cease; how-
ever, the Employers do not require trucks to report
at any scheduled time. Scheduled trucks are loaded
on a first come, first serve basis, and the Employ-
ers do not keep track of the number of hauls per
day nor do they require a specified number of
hauls per day. In addition, the Employers control
the destination of the coal deliveries; however,
they retain no control over the routes to be taken
to make the delivery. During inclement weather,
the Employers make an initial determination as to
whether trucks will be loaded, but the truck
owners retain the right to refuse to haul coal on
such days, and no owner has ever been penalized
for refusing to accept a load during inclement
weather. If a truck overturns and loses a load of
coal, the Employers do not pay the hauling cost
for that load or pay for any damages to the truck.
The Employers only compensate the truckowners
for completed deliveries of coal to the tipples.
The Employers control the amount of coal
loaded on the trucks, and on occasion trucks are
loaded beyond the legal weight limits permitted on
the roads between the mines and the tipples. When
local officials have complained about the over-
loaded trucks, the Employers have responded by
lightening the loads. In addition, the Employers
have used their influence to assist truck owners in
attempting to reduce fines received for operating
overloaded trucks on county and state roads. How-
ever, the Employers have never paid any portion
of such fines, tolls, or highway use taxes on behalf
of truck owners. The Employers pass on warnings
received from state and county officials regarding
trucks being driven in a reckless manner or at ex-
cessive speeds. The Employers, however, retain no
control over the manner in which trucks are driven
when off company property. The Employers have
never penalized a truck owner because of excessive
tickets, nor have the Employers ever paid any por-
tion of a traffic fine received by truck owners.
The Employers on occasion have warned drivers
about speeding and driving recklessly on company
property. In one instance, after repeated warnings
about reckless driving, the Employers canceled an
owner-operator's hauling privileges after he had
I One owner-operator testified that he was "laid off' for I week be-
cause he had left work early. The witness further testified that he ceased
hauling at midday without informing the Employers that his truck would
not be available for the full day. Witnesses for the Employers testified
that truck owners were not penalized for failing to show on a scheduled
day or appearing late or leaving early.
knocked down the telephone lines to the Employ-
ers' main office. On another occasion, the Employ-
ers temporarily denied hauling privileges to an
owner-operator because that owner-operator had
"rudely" interfered with an important business con-
versation being conducted by a high official of the
Employers.
If the Employers are dissatisfied with the per-
formance of a driver, the Employers initially warn
the driver. If the driver's performance does not im-
prove, the Employers complain to the truck owner.
If improvement is still not forthcoming, the Em-
ployers inform the truckowner that the particular
driver will no longer be permitted on company
property. The Employers, however, permit the
truck owners to substitute a new driver. Witnesses
for the Employers testified that similar action has
been taken against employees of other vendors pro-
viding services for the Employers who have per-
formed in an unsatisfactory manner.
Witnesses for the Petitioner testified that they
have been required to haul gravel and equipment
for the Employers without being compensated and
that they "believed" that they would be disciplined
if they refused such "free hauling requests." Wit-
nesses for the Employers, on the other hand, testi-
fied that truckowners are paid for hauling gravel to
or from the Employers' rock quarry; however,
truckowners are not compensated for hauling
gravel to repair company roads utilized by the
trucks. The record indicates that no truckowner or
driver has ever been penalized for refusing to haul
gravel. With regard to the hauling of equipment,
witnesses for the Employers testified that on occa-
sion the Employers have requested, as a favor, that
truck owners carry equipment in the cabs of their
trucks. These witnesses further testified that on oc-
casion truck owners have refused such requests and
that no truckdriver or owner has ever been penal-
ized for refusing such a request.
The Employers retain no control over the truck-
owners' right to haul cargo on the return trips
from the tipples to the mines. However, because of
the relatively short distance traveled and the isolat-
ed locations of the Employers' mines, it is unlikely
that any cargo would be available for back hauling.
The truck owners are not required to haul exclu-
sively for the Employers, and a number of truck
owners have hauled cargo for other employers. 7
The Employers do not enforce any Interstate Com-
merce Commission regulations or any other State
? Several truck owners testified that they have hauled exclusively for
the Employers. These truck owners, however, further testified that work
in the area has been limited. No truckowner testified that he has been
required to haul exclusively for the Employers or that he has been penal-
ized for hauling for other companies.
565
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
or Federal agency regulations controlling the
manner or means by which the truckowners per-
form their duties.
Analysis and Conclusions
In N.L.R.B. v. United Insurance Company, 390
U.S. 254, 256 (1968), the Supreme Court, in agree-
ment with the Board, pointed out that the Board
"should apply the common-law agency test . . . in
distinguishing an employee from an independent
contractor." Accordingly, in determining whether
an individual is an employee or an independent
contractor under the Act, the Board has consistent-
ly applied the common-law test of "right to con-
trol."8 Thus, the Board finds a relationship to be
one of employment where the one for whom the
services are performed retains the right to control
the manner and means by which the result is ac-
complished. On the other hand, the Board finds a
contractor relationship where the one for whom
the services are performed merely retains control
over the result to be accomplished. The application
of this test is a difficult process which requires that
"all of the incidents of the relationship must be as-
sessed and weighed with no one factor being deci-
sive."9
In the instant case there are an overwhelming
number of factors which indicate that the truck
owners are independent contractors. ' The Em-
ployers' oral agreements are with the truck owners
and not the drivers.' The Employers maintain no
personnel files for the drivers or truck owners and
often the Employers are unaware of the identity of
the individual driving a truck. Significantly, the
Employers have no control over the selection of
drivers and the owners are free to substitute driv-
ers at any time. Regardless of who drives a truck,
the Employers compensate the truck owners, and
the compensation is based on the amount of coal
hauled by a truck, not the number of hours worked
by a particular individual. Although the Employers
provide fringe benefits, make social security, unem-
ployment, and workmen's compensation payments,
and withhold taxes on behalf of other classifica-
tions of employees, the Employers do none of the
above for truck owners. The nonoperator owners
are entirely responsible for setting the terms and
conditions, hiring, disciplining, and firing non-
owner drivers. The Employers have no input as to
8 Air Transit, Inc., 248 NLRB 1302, 1306 (1980). See, generally, Re-
statement of Agency 2d §220 (1958).
9 United Insurance Company. supra at 258.
10 See Kentucky Prince Coal Corporation, 253 NLRB No. 70 (1980). for
a discussion of similar issues.
I As indicated earlier, in some instances the owners operate their own
trucks, whereas in other instances the owners hire other individuals to
operate their trucks. The Petitioner does not seek to represent any of the
nonowners.
whether the nonowner drivers receive fringe bene-
fits, social security, workmen's compensation, and
unemployment benefits, or have taxes withheld on
their behalf.
Although the hauling of coal is essential to the
Employers' operations, the truck owners do not do
business in the Employers' name. The trucks have
no markings indicating any association with the
Employers, and the drivers wear no uniforms indi-
cating an association with the Employers. The Em-
ployers do not require that a truck haul coal exclu-
sively for the Employers and, on a number of oc-
casions, owners have hauled coal for other compa-
nies. Significantly, the truck owners retain the right
to refuse to haul coal for the Employers at any
time. The Employers determine the destination and
type of coal loaded on the trucks, but such deter-
minations are more concerned with the result to be
achieved then with the means used to achieve the
result. In addition, the Employers do not exert any
control over the route that the trucks take in deli-
vering the coal. The Employers determine the
amount of coal loaded on the trucks and this
weight often exceeds weight limits permitted on
local roads. The truck owners, however, retain the
right to refuse to haul such loads. '2
The Employers have no financial interest in any
of the trucks, and it is clear that the trucks repre-
sent a substantial capital investment on the part of
the truck owners. The Employers make no safety
inspections of the trucks and the Employers have
no requirements regarding the trucks other than an
ability to haul large amounts of coal. The truck
owners are entirely responsible for fueling, repair-
ing, and maintaining their vehicles. All of these
factors are evidence of independent contractor
status.
The record also indicates that the Employers
lack the authority to impose and/or change unilat-
erally the truck owners' working conditions. Thus,
when Bass Trucking attempted to force truck
owners to sign written agreements setting forth
new terms and conditions, the truck owners re-
fused to sign and/or comply with Bass' written
agreement. No action was taken against the truck
owners and they continued to operate under the
preexisting oral agreements. Such independence is
clearly indicative of independent contractor status
and not employee status.i 3
Although the Employers determine the times
that they will commence and cease loading coal,
12 Georgia Pacific Corporation, 249 NLRB 1280 (1980).
13 Compare with Air Transit, supra, at 1310, where a majority of the
Board, Member Penello dissenting, found that an employer's right to uni-
laterally impose terms and conditions of employment evidenced employee
status.
566
TARHEEL COAILS. INC.
the Employers do not require trucks to report or
cease hauling at specified times. Rather, scheduled
trucks are loaded on a first come, first serve basis,
and owners and/or drivers are not required to keep
specified hours. As indicated earlier, the scheduling
system utilized by the Employers was devised at
the request of the owners in order to distribute
loads on a more equitable basis and to create a
more orderly workplace. In view of the truck
owners' right to decline work at anytime, it is clear
that the truck owners, not the Employers, deter-
mine when a truck will be available for hauling. 4
Thus, the scheduling system amounts to little more
than a routine method of distributing work, and the
Employers' request that they be notified if a sched-
uled truck is unavailable for hauling evidences an
extension of courtesy between contractors doing
business with each other and merely provides a
degree of order benefiting all of the parties. Ac-
cordingly, we find that the Employers' scheduling
system is not indicative of employee status. '
Another significant indication of employee-inde-
pendent contractor status is the authority to exer-
cise discipline. Although a contractor can inform
an independent contractor of its general business
standards and a contractor can discontinue the con-
tract if the standards are not met, a contractor
cannot discipline an independent contractor for
failing to comply. In the instant case, the record
fails to establish that the Employers have exercised
any disciplinary authority. Thus, as indicated earli-
er, the Employers maintain no personnel records
and often are unaware of the identity of the indi-
vidual driving a particular truck. The Employers
do not keep track of the number of trips made by a
particular driver, and efficient drivers are not re-
warded and inefficient drivers are not punished.
The truck owners retain the unilateral right to de-
termine who drives their trucks and they are free
to substitute drivers at any time.
Although the Employers require that trucks be
driven in a safe and prudent manner while on the
Employers' property,' 6 the Employers exert no
]4 Georgia Pacific Corporation. supra
1' See, generally, Restatement of Agency 2d. $220 comment at 491
which indicates that rules made for the general policing of the employer's
workplace are not indicative of employee status
'6 As indicated previously, if the Employers are not satisfied with the
performance of a truckdriver, initially they will communicate their dissat-
isfaction to the driver If a driver's performance does not improve, tile
Employers communicate their dissatisfaction to Ihe truck oners On oc-
casion the Employers have permanently or temporarily denied hauling
privileges to drivers who continued to perform in an unsatlsfactory
manner In such instances, however, the Employers have permitted the
truck owners to substitute a different driver in order to continue hauling
coal for the Employers The record further reveals that the Employers
have denied access to their property to employees of endors other than
control over the manner in which trucks are driven
or drivers perform away from the Employers'
property. Thus, the Employers have not disciplined
drivers because of traffic violations or reports of
reckless or unsafe driving off of the Employers'
premises. Similarly, the Employers do not disci-
pline truck owners or drivers who have been fined
for driving overweight trucks on county or state
roads. 17 The truckowners are entirely responsible
for the manner in which the trucks are driven
away from the Employers' premises.
In reaching our conclusion that the truck owners
sought by Petitioner are independent contractors,
we have not ignored certain factors indicating em-
ployees status. Thus, the truck owners perform
functions essential to the Employers' operations.
The Employers set the hauling rates. There is no
evidence that the truck owners require any special
qualifications or training, and some of the truck
owners have a continuing relationship with the
Employers. However, the instant case is distin-
guishable from other recent cases wherein we have
found employee rather than independent contractor
status. Unlike Air Transit, supra, the Employers
herein retain no control over the right to substitute
drivers, unilaterally change or impose working
conditions, discipline truck owners or drivers, or
control the performance of drivers or truck owners
away from the Employers' premises. Similarly,
there is no evidence here of the extensive govern-
ment regulations which introduced many of the
elements of employment into the working relation-
ship in Mitchell Bros. Truck Lines, 249 NLRB 476
(1980). Rather, like our recent decisions in Ken-
tucky Prince Coal Corporation, supra, and Georgia
Pacific Corporation, supra, the record as a whole in-
dicates that the Employers here do not retain con-
trol over the manner and means by which the
truck owners haul coal and that, therefore, the
truckowners do not have an employment relation-
ship with the Employers. 8
truck owners who have performed in an unsatisfactory manner. Such iso-
lated incidents do not evidence the imposition of discipline Rather, they
are indicative of a contractor's requirement that nonemployees conform
with general rules established to police a contractor's premises See, gen-
erally. Restatement of Agency 2d, §220, 2(l) at 491
' We do not find that he passing along of warnings that officials or
residents have complained about speeding or overloaded trucks indicates
that the Employers exert disciplinary control over the truck owners.
' Memhber Penello agrees that the coal haulers are independent con-
tractors In reaching this result he finds it unnecessary to distinguish this
majority's finding from .4ir 7nit, upra. in hich he dissented from the
majority's finding that certain taxicab drivers were not independent con-
Iractors
507
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In view of all the foregoing, we find that the
truck owners sought by the Petitioner to be inde-
pendent contractors rather than employees. Ac-
cordingly, we shall dismiss the petition.
ORDER
It is hereby ordered that the petition herein be,
and it hereby is, dismissed.
568