Yellow Cab Co.

National Labor Relations Board - Board Decisions

Jun 7, 1977

229 N.L.R.B. 1329 (N.L.R.B. 1977)

YELLOW CAB COMPANY
Yellow Cab Company and Local 777, Democratic
Union Organizing Committee, Seafarers Interna-
tional Union of North America, AFL-CIO
Checker Taxi Company, Inc. and Local 777, Demo-
cratic Union Organizing Committee, Seafarers
International Union of North America, AFL-CIO.
Cases 13-CA-14142, 13-CA-14143, and 13-CA-
13973
June 7, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS, PENELLO, AND MURPHY
On September 17, 1976, Administrative Law Judge
Marvin Roth issued the attached Decision in this
proceeding. Thereafter, General Counsel and the
Charging Party filed exceptions and supporting
briefs, and Respondents filed a brief in answer
thereto.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs 1 and has decided to affirm the rulings, 2
findings, and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
Yellow Cab Company and Checker Cab Company
are related corporate entities which provide taxicab
service in the city of Chicago. Together, Yellow and
Checker, Respondents herein, own and operate over
three-fourths of the taxis in the Chicago area. 3 Each
Company conducts a single integrated operation and
each has a separate hierarchy of management
personnel, although both Companies are part of a
complex conglomerate of firms engaged in the
business of transporting passengers for hire and
furnishing products or services for that industry.
Both Companies consequently cooperate and work
closely together in conducting their respective opera-
tions and both conduct their operations in a
substantially identical manner.
Prior to July 1, 1975, Yellow and Checker operated
on an exclusively commission driver basis. Under
this system, drivers were paid, in accordance with a
fixed schedule, a percentage of the money taken in
I Respondents' request for oral argument is hereby denied, because the
record, the exceptions, and the briefs adequately present the issues and the
positions of the parties.
2 The Charging Party has requested the Board to take judicial notice of
(I) certain new city of Chicago regulations affecting the taxicab industry
which were promulgated after the close of the heanng in this case, (2)
certain facts which are on record with the office of the Chicago
Commissioner of Sales, Weights and Measures, and (3) a bulletin issued by
Respondent Checker and a newspaper advertisement which announce a
proram of free hospitalization insurance to be furnished by Checker to its
essee drivers. We hereby take judicial notice of the newly promulgated city
of Chicago regulations, as these are properly within the province ofjudicial
notice. We decline, however, to take judicial notice of the other requested
items, as these are not matters which can properly be judicially noticed.
229 NLRB No. 190
on the meter. The Union, which in 1961 was certified
as the collective-bargaining representative of both
Companies' employees, represented these commis-
sion drivers.4
In August 1974, the Companies began to discuss
the possibility of leasing taxicabs through wholly
owned corporate subsidiaries. The Companies were
attracted to leasing because of the declining profit-
ability of their commission driver operations, and, in
fact, there has been a trend towards leasing through-
out the taxicab industry in recent years. The
Companies drew up detailed plans for the proposed
leasing operations and secured from the Internal
Revenue Service a favorable ruling exempting the
proposed lessees from the withholding requirements
of the Federal tax laws. The Companies also applied
to the Chicago Public License Vehicle Commissioner
for permission to transfer some cab licenses from the
Companies' commission operations to the subsidiary
leasing operations. All this was done over the
Union's protest and in disregard of the Union's
request for a meeting to discuss the Companies'
proposal.
In late May 1975, the Vehicle Commissioner
decided not to approve Yellow's and Checker's
request for the transfer of licenses. Consequently, the
plan to lease through corporate subsidiaries had to
be scrapped. At this point, the Companies began to
formulate a plan for the direct leasing of cabs, as an
adjunct to their regular commission operations.5
On June 5 and again on June 17, the Companies
met with the Union to discuss the proposed leasing
plan. The Companies outlined the details of the plan
to the Union but refused to recognize the Union as
the collective-bargaining representative of the lessee
drivers. The Companies also refused to bargain over
the decision to lease, a decision that by this time had
well nigh been made. The Union, for its part, insisted
that any negotiations about the leasing program be
conditioned upon company recognition of the Union
as the collective-bargaining representative of the
lessee drivers.
3 The number of cabs in Chicago is determined by the number of cab
licenses issued by the Commissioner of Consumer Sales, Weights and
Measures for the City of Chicago (formerly Public License Vehicle
Commissioner). At present, the number of cab licenses is fixed at 4.600.
Yellow holds 2,166 of these and Checker holds 1,500.
4 The collective-bargaining contracts covering each Company's commis-
sion drivers have in practice been negotiated in joint session. Each
Company then signs separate but identical contracts.
I In furtherance of this plan, the Companies applied to the Internal
Revenue Service for a supplemental ruling. A favorable supplemental ruling
was obtained by the Companies on October 28. 1975-several months after
direct leasing had gone into effect.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Two weeks after the last meeting, the Companies,
on July 1, 1975, commenced direct leasing opera-
tions.6
The principal question before us is whether the
Companies unlawfully refused to recognize the
Union as the representative of the lessee drivers. This
question is in turn dependent upon the status of the
lessee drivers under the Act. The collective-bargain-
ing agreement between the Union and the Compa-
nies provides that the Union shall be the exclusive
representative of the Companies' employees. If, as
General Counsel and the Union contend, the lessee
drivers are employees within the meaning of the Act,
then by failing to apply the terms of its collective-
bargaining agreement with the Union to these lessees
the Companies violated Section 8(a)(5) of the Act.7
If, as the Companies contend (and the Administra-
tive Law Judge found), the lessee drivers are not
employees within the meaning of the Act, but are
instead independent contractors, then Respondent
Companies' refusal to recognize the Union was not a
violation of the Act. We turn then to a consideration
of the facts bearing on this issue.
The Companies' relationship with its lease drivers
is grounded in the terms of the lease agreement.
There are three types of leases-day, night, and 24-
hour. Day leases run from 6 a.m. to 6 p.m. and night
leases from 6 p.m. to 6 a.m. The lessee pays a fixed
fee to obtain the lease (e.g., $22 for a day lease, $15
for a night lease) and there is an hourly charge for
late returns. After a driver has leased for 4 consecu-
tive days in a week, he may lease at a reduced rate
for the fifth and subsequent days. The driver may
lease for 2 days at a time, or 3 days on weekends;
however, he must sign a separate lease for each
separate lease term. As security, the lessee agrees to
post a damage bond ($100 to Checker and $250 to
Yellow) which is applied toward the cost of repairing
the cab in the event of an at-fault accident. In
practice, although this is not specifically provided in
the lease agreement, the garage manager unilaterally
determines whether the driver is at fault.
In addition to the above financial obligations, the
lessee driver agrees that he will be the sole driver of
the vehicle and will not sublease the cab. He agrees
to inspect the vehicle at the beginning of the lease
term and report any defects to the Companies. In the
event of an accident, he is required to notify the
police and the Companies' insurer although, again,
the actual practice has deviated slightly from the
R Originally. the lease fleets were very small, numbering about 10 cabs
for each Company. By February 1976, the time of the hearing, these fleets
had grown considerably. At that time, Checker had 279 cabs in its lease fleet
and Yellow had 225 cabs. The lease fleets consist of newly purchased cabs
and unneeded or idle cabs that have been transferred from the commission
fleet. Lease drivers are separately recruited. Thus, no commission drivers
have been transferred from commission operations to leasing operations.
terms of the agreement-the Companies ask that
they be notified as well. The lessee driver further
agrees to return the cab at the end of the lease in an
undamaged condition and with a full tank of gas.
Gas is provided by the lessee driver and may be
purchased anywhere.
The Company, for its part, furnishes the cab, the
cab license, liability insurance, towing service, tires,
antifreeze, oil, maintenance, repair of all damage
determined not to be the fault of the driver, and
repair of all damage in excess of the lessee's damage
deposit. The driver can also receive a prorata
reimbursement of the cost of his lease for the time he
has lost due to repair. These provisions undoubtedly
make leasing very attractive from the lessee driver's
standpoint, since, as a result, he has very little
investment in the instrumentality of his work. This is
highlighted by the fact that all of the Companies'
cabs, both lessee cabs and commission cabs, are
identical in appearance. The lessee driver leases the
right to use the Companies' trade names and is
expressly forbidden to put any other trade name on
the taxi. Any goodwill arising from the use of the
Companies' trade names inures to the Companies'
benefit.
The lease agreement disclaims any intention to
create an employer-employee relationship between
the Companies and their lessee drivers. Thus, the
lease recites that lessee drivers are not required to
operate the taxicabs in any prescribed manner, to
accept any calls or dispatches, to report the location
of the cab during the lease period, or to maintain the
cab in any designated place.
Despite the ostensible disavowal of control over
lessee drivers by the Companies, paragraph 2(f) of
the lease provides, in pertinent part, the "lessor may
terminate the term of the lease and may repossess the
cab without demand at any time if the cab is illegally
parked or used in violation of the law or of this
Agreement or is apparently abandoned or if Lessee
breaches any of the terms of the lease."
The true significance of requiring lessee drivers, on
pain of immediate termination of the lease, to
comply with all applicable laws, ordinances, and
governmental rules and regulations is at once
apparent when one considers the record evidence of
the pervasive scheme of Chicago municipal regula-
tions and state law governing taxicab drivers and the
operation of taxicabs. Thus, applicable law requires,
among other things, that every cab be operated
However, former commission drivers have been contacted to ascertain their
interest in leasing.
T As the Administrative Law Judge pointed out, the collective-bargaining
contract provides that the drivers shall receive commissions in accordance
with a schedule of rates set forth in the contract, and that for this reason, if
for no other, the contract precludes any leasing arrangement for the drivers
within the bargaining units.
1330
YELLOW CAB COMPANY
regularly to the extent necessary to meet the public
demand for service, that the taxi meter flag be kept
down when the cab is carrying passengers, and that
everyone who requests a ride must be picked up
unless the cab already is occupied. The municipal
code also establishes fare rates in the city of Chicago
and prohibits a driver from charging more or less
than the established rates, from carrying a front seat
rider or carrying unrelated group riders except at the
direction of the original passenger, and from refusing
to transport passengers from the airport to any
suburb of the city.
With regard to the conduct of taxi drivers, the
municipal code prohibits drivers from using intoxi-
cants or drugs, from carrying a deadly weapon while
operating a cab, from loitering in public areas
outside their cabs or leaving their cabs unattended,
and from violating any traffic law or regulation.
Furthermore, the rules and regulations promulgated
by the Public License Vehicle Commission regulate
such matters as standards of courtesy to passengers,
proper appearance and attire of drivers, conduct at
cab lines, and the like.
As even this abbreviated recital of applicable law
and regulation makes evident, nearly every facet of a
driver's work and conduct is fixed by governmental
rule and regulation. Moreover, each lessee driver is
aware that under the power reserved by the Compa-
nies in paragraph 2(f) of the lease even a technical
infraction of a minor rule or regulation can result in
the immediate termination of the lease and the
repossession of the taxicab by the Company. Accord-
ingly, one can only conclude that the Companies, by
making compliance with the municipal regulations a
condition of the lease and by making any violation of
any such regulations grounds for canceling the lease,
effectively exercise control over all matters covered
by the regulations.8
The Companies' practice supports this conclusion,
for the record establishes that the Companies use the
threat of a city action to correct a lessee driver's
errant conduct. The testimony of the manager of one
Checker garage is particularly instructive on this
point. He testified that on receiving customer
complaints he may refer the complaints to the
Consumer Commissioner, or he may warn the driver
in question that further complaints will be referred to
the Commissioner for action. In cases involving
allegations of overcharging, the garage manager
testified that he will instruct the driver to give the
Company a check for the amount overcharged. If the
driver balks, the manager will threaten to call the
I Our dissenting colleague's characterization of the Companies' retention
of the unfettered power to cancel a lease upon any violation of law or
municipal rule or regulation as an "abdication" of control on their part is
without substantive meaning, at odds both with the record evidence in this
Commissioner and to support the customer's com-
plaint when it reaches the Commissioner's office. As
this testimony illustrates, the Companies' supervisors
use the threat of municipal action as a convenient
and effective way to maintain control and discipline
among the lessee drivers. Indeed, given the far-
reaching scope of the relevant municipal rules and
regulations, the Companies could not more effective-
ly have insured their control over the day-to-day
operation and activities of their lessee drivers had
they handed out a "rule" book and directed drivers
to conform to such rules under threat of discharge.
Yellow and Checker have avoided any necessity for
training lessee drivers by following a policy of leasing
only to experienced cab drivers. If an applicant
appears to have potential as a successful lessee cab
driver, but lacks the necessary training or experience,
the lease garage manager will suggest that he apply
for a job as a commission driver and come back
when he has the requisite experience. The applicant
must fill out a short application form which includes,
among other things, driving experience and personal
references. The lease garage manager then interviews
the applicant and checks out the information on the
application form. If the lease garage manager
approves the application, the applicant will be
assigned a cab. Although the lease states no grounds
for initially refusing to lease, the lease garage
manager will refuse to lease to someone who has a
record of unsafe driving or is addicted to drugs, as
well as to those who lack experience or who have no
chauffeur's license.
The lease itself is not negotiable and the Compa-
nies are under no obligation to extend or renew the
term of the lease-the Companies have complete and
final discretion in this regard. As a practical matter,
the lease garage manager will refuse to renew a lease
for reason of a bad at-fault accident, unsafe driving,
subleasing, drinking, and failure to pay money. The
garage manager also reserves the right to refuse to
lease to anyone who is destructive, abusive to
company personnel, or difficult to keep around-
amorphous grounds which indicate that the garage
manager has wide latitude in deciding whether to
lease. Customer complaints will not, however, consti-
tute grounds for refusing to lease unless the com-
plaint relates to matters which indicate unsafe
driving, drinking, etc.
In addition to the above, the Companies place
certain restrictions on lessee drivers which are not
contemplated by or incident to the lease agreement.
Among the most important of these is a requirement
case and with the Board's reasoning in numerous prior decisions. See
Checker Cab Association, Inc., 185 NLRB 182 (1970). See also John Himmer
Transfer, Inc., 221 NLRB 284 (1975): Dixie Transport Companty. 218 NLRB
1243 (1975).
1331
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that the lessee drivers drive no more than 250 miles a
day. Theoretically at least, this mileage limitation
imposes a limit on the lessee drivers' earnings.
Another important requirement is that lessee drivers
observe certain dress restrictions-restrictions which
exceed those set forth by municipal regulations. Still
another restriction is the Companies' insistence that
the lessee drivers have their cabs repaired at the
Companies' garages.
At the time of the hearing, the Companies were
considering the purchase of group hospitalization
and IRA retirement plans for the lessees, but did not
provide lessees with any of the fringe benefits such as
medical insurance, pensions, vacation pay, etc.,
available to its commission drivers. The Companies
did, however, maintain a workmen's compensation
policy which, though of disputed scope, may, under a
recent Illinois Supreme Court decision, be deemed to
cover the lease drivers.9
The Board has consistently held that the "right-to-
control" test is the proper test to apply in determin-
ing whether individuals are employees or indepen-
dent contractors under the Act. As the Board
recently stated, "Under this test, an employer-em-
ployee relationship exists when the employer reserves
not only the right to control the result to be achieved,
but also the means to be used in attaining the result.
On the other hand, where the employer has reserved
only the right to control the ends to be achieved, an
independent contractor relationship exists. It is clear
that application of this test is not a 'perfunctory
exercise.' In order to determine the nature of the
relationship, the Board analyzes the facts presented
in the particular case, balances them, and arrives at a
result." 10
In the case before us, we find that the factors
demonstrating employee status for the lessee drivers
outweigh factors indicating independent contractor
status. We therefore conclude the drivers are employ-
ees of the Companies within the meaning of the Act.
Our determination that the lessee drivers are employ-
ees rather than independent contractors is based
particularly on the following: (1) the lessee drivers
have no investment in the instrumentalities of their
work; (2) the lessee cabs display the Companies'
insignia and all goodwill arising from operation of
the cabs inures to the Companies' benefit; (3) the
work performed by the lessee drivers is an essential
part of the Companies' normal operations; (4) the
lease term is short and is renewable only at the
Companies' discretion; (5) the terms of the lease are
unilaterally set by the Companies; (6) the lessee
9 See Penny Cab Co. v. Industrial Commission, 60 Ill. 2d 217, 326 N.E. 2d
393 (1975).
1o Twin City Freight, Inc., S & B Nelson, Inc., 221 NLRB 1219, 1220
(1975).
driver is required by the Companies, upon penalty of
forfeiture of the lease, to obey a pervasive scheme of
municipal regulations; (7) no subleasing is permitted;
(8) the Companies discipline lessee drivers through
the threat of city action; (9) the lessee drivers are, in
the manner of regular employees, subject to reference
checks at the time of application for a lease; (10) the
Companies unilaterally determine whether a lessee
driver is at fault in the event of an accident; (11) the
Companies have imposed a 250-mile limitation on
miles driven during the term of the lease; (12) the
Companies have imposed dress restrictions on the
lessee drivers; and (13) the Companies, at least
arguably, provide workmen's compensation insur-
ance for the lessee drivers.
It is doubtless true that through leasing the
Companies have, by substituting economic incentives
for more direct means of control, been able to
relinquish some of their supervisory and regulative
responsibilities. By charging a flat fee for use of the
cab instead of collecting a percentage of the driver's
daily fares, the Companies have freed themselves of
the necessity of enforcing rules designed to prevent
cheating. Similarly, by charging a fee for late returns,
punctuality is assured without the need for discipline.
However, it is also patently clear that the Companies
have retained considerable control over the lessee
drivers and that only by ignoring business realities
can it be said that these drivers exercise any real
"independence."
The lessee drivers' lack of independence is mani-
fested by the facts that the drivers have no invest-
ment in the instrumentalities of their work, the terms
and conditions under which they work are unilateral-
ly established by the Companies, the Companies
retain complete discretion to terminate the work
relationship, and the Companies have seen fit to
impose various restrictions not specifically men-
tioned in the terms of the lease. Moreover, by
voluntarily inserting into the terms of the lease the
requirement that lessee drivers obey all applicable
municipal regulations, the Companies have reserved
control over much of the lessees' work behavior. The
fact that the Companies use the threat of city action
to keep the drivers' conduct in line bears this out.
Other facts which tend, in the present case, to point
towards independent contractor status are in our
view outweighed by facts which establish control.
The fact that the lessee drivers pay no Federal
withholding taxes, though relevant, is not determina-
tive of independent contractor status." The absence
of fringe benefits is of some relevance but is of little
" See Checker Cab Comp any and its Members, 141 NLRB 583 (1963), 153
NLRB 651 (1965), affd. 367 F.2d 692 (C.A. 6, 1966); Blue Cab Company and
Village Cab Company, 156 NLRB 489 (1965).
1332
YELLOW CAB COMPANY
probative value (especially in light of the fact that the
Companies have considered making fringe benefits
available to the lessees). And, finally, although the
drivers are admittedly on their own once they leave
the garage and are free to prospect for fares when
and where they choose, this, as was articulately
pointed out in Checker Cab Association, Inc., supra, is
"inherent in the nature of the work" and is therefore
not of special significance.
Contrary to the views of the Administrative Law
Judge and our dissenting colleague, Columbus Green
Cabs,12 is not controlling here. The Board has, on
numerous occasions, applied the right-to-control test
in cases in the taxicab industry and found the drivers
to be employees within the meaning of the Act.13 In
other and more recent cases, as noted by the
Administrative Law Judge, the Board has found
taxicab drivers to be independent contractors.' 4
Significantly, none of the later cases overruled any of
the earlier cases. Thus, it is without question that the
result in these cases-involving whether or not
taxicab drivers are employees-must turn on the
specific and individual facts of each case. In regard
to Columbus Green Cabs, Inc., suffice it to say that it
and similar cases must be narrowly construed in
order that employees not be denied the protection of
the Act through an undue extension of independent
contractor status.
Here, the following factors, not present in Colum-
bus Green and indicative of an employer-employee
relationship, support our conclusion that the drivers
herein are employees within the meaning of the Act.
Prior to leasing to drivers, the Companies here
conduct reference checks on prospective lessees.
They impose a 250-mile-per-lease limit on drivers
which serves as a restriction on earnings, as well as a
control to prevent subleasing. While driving, the
drivers must observe dress regulations mandated by
the Companies. By their use of day and night leases
(i.e., those of less than a 24-hour duration), Yellow
and Checker are able to prescribe the hours of work.
Drivers are required to have all repairs on cabs
performed at the Companies' garages, and the
Companies' garage managers, in effect, determine
unilaterally whether the driver was at fault for
accidents or damage. The Companies have consid-
12 Columbus Green Cabs, Inc.; Yellow Cabs, Inc.; Easrside Cab Company,
and Radio Cab Company, 214 NLRB 751 (1974).
13 See Checker Cab Company and its Members, supra, Blue Cab Company
and Village Cab Company, supra; Association of Independent Taxicab
Operators, Inc., T/A Diamond Cab, and its Members, 164 NLRB 859 (1967);
Southern Cab Corporation, Yellow Cab of Memphis Division, 159 NLRB 248
(1966); Central Taxi Service, et al., 173 NLRB 826 (1968); Transportation
Promotions, Inc., et al., 173 NLRB 828 (1968); Miami Beach Yellow Cab, et
al., 173 NLRB 831 (1968); Checker Cab Association, Inc., 185 NLRB 182
(1970); Buffalo Cab Co., Inc., 189 NLRB 410(1971).
14 In addition to Columbus Green Cabs, Inc., supra, see also Greater
Houston Transportation Company and All Other Employees d/b /a Yellow Cab
Company, 208 NLRB 1020 (1974), and Barnwood Inc., 209 NLRB 19 (1974).
ered offering group hospitalization and retirement
plans and they arguably cover their lessee drivers
under workmen's compensation. Finally, the perva-
sive scheme of municipal rules and regulations and
the Companies' right to cease immediately renewing
the leases of drivers for any violation thereof-as
heretofore more fully explained-represent a sub-
stantial control weighing significantly in favor of
employee status.15
Certain aspects favoring employee status, present
in Columbus Green Cabs but not present here, cannot,
under the circumstances herein, be deemed signifi-
cant. Here, the Companies have no training program,
but it is clear that they have bypassed the need for
such by leasing only to experienced drivers. Neither
the absence of a trip sheet16 nor the manner here of
computing the lease fee constitutes a significant
factor showing independent contractor status.
Accordingly, finding that those aspects of the
owner-driver relationship showing extensive control
outweigh those factors indicating driver indepen-
dence, we conclude that the lessee taxicab drivers of
the Companies are employees within the meaning of
the Act. Therefore, we find that by refusing to
recognize the Union as the collective-bargaining
representative of the Companies' lessee drivers and
by unilaterally and without the agreement of the
Union changing the terms and conditions of employ-
ment of these employees, Respondents violated
Section 8(aX)(5) and (1) of the Act.
We also find that the Companies unlawfully
refused to bargain about their decision to lease cabs
to drivers. The Administrative Law Judge found that,
although the Companies were willing to anwer the
Union's questions about the decision to create a
leasing program, it was clear that "they had no
intention of permitting the Union to participate in
that decision." The Companies had no past practice
of leasing, and, in light of the fixed number of cab
licenses owned by the Companies, the leasing
operation would, of necessity, work to the detriment
of commission drivers by decreasing the size or
potential size of their unit. Accordingly, the decision
to create lessee drivers involved a mandatory subject
of bargaining and the Companies' refusal to bargain
about the matter violated Section 8(aX)(5) of the Act.
1s In effect, the Companies' ability to insist on compliance with all
municipal rules and regulations, as well as their right to decide unilaterally
whether any accident or damage was the driver's fault, invests the
Companies with authority that is tantamount to a strict disciplinary power
that was not present in Columbus Green Cabs.
16 As heretofore noted in fn. 2, we would take judicial notice of the new
rules and regulations on record with the office of the Chicago Commnssioner
of Sales, Weights and Measures. Those new rules and regulations include a
requirement that all taxicab drivers must keep a daily record of all fares
collected. Thus, the drivers in question are now required to keep a trip sheet.
However, even the absence of any such requirement would not dictate a
contrary result herein.
1333
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
See Fibreboard Paper Products Corp. v. N.L.R.B., 379
U.S. 203 (1964). See also Blue Cab Company and
Village Cab Company, 156 NLRB 489 (1965), enfd.
373 F.2d 661 (C.A.D.C., 1967). Given the Compa-
nies' preordained refusal to bargain about the
decision to lease, we, contrary to the Administrative
Law Judge, find it immaterial and no defense for the
Companies that the Union adamantly sought to
condition negotiations upon its being recognized as
the bargaining representative of the lessee drivers.
One other matter needs to be disposed of. The
complaint alleges that since on or about July 1, 1975,
the Companies have refused to supply the Union
with requested information necessary to the adminis-
tration of the contract, in violation of Section 8(a)(5)
of the Act. Three requests for information are
involved.
On June 30, 1975, the Union requested each of the
Companies to furnish information on the number of
new cabs purchased and placed in use by the
Companies in the years 1972-75, and to tell whether
any of the new cabs which had been ordered were for
assignment to drivers not covered by the contract.
The Companies, by letter of August 5, 1975, supplied
the Union with the number of new cabs purchased
and placed in use during the years 1972-75, but did
not supply the Union with the other requested
information.
On June 30, 1975, the Union requested the
Companies to furnish it with the reasons for each
employee termination in the years 1973-75. The
Companies did not respond to this request.
On July 17, 1975, the Union requested that the
Companies furnish copies of the Companies' operat-
ing statements to date and tax returns from 1973 to
date (with balance sheets if a consolidated return was
filed). The stated predicate for this request was to
enable the Union to evaluate the Companies' claim
that economic necessity had dictated the decision to
go into leasing. The Companies did not respond to
this request.
The above-requested information was clearly
relevant to the Union, inasmuch as it touched upon
the extent to which the leasing operation had
adversely affected the Companies' commission dri-
vers and also touched upon the asserted reasons for
the Companies' decision to go into leasing, a decision
that was contrary to the terms of the collective-
bargaining agreement. Consequently, we find that by
refusing to furnish this information Respondents
violated Section 8(a)(5) and (1) of the Act.
REMEDY
Having found that Respondents have engaged in
unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act, we will order Respondents
to cease and desist therefrom and take appropriate
affirmative action. Respondents will be directed to
recognize the Union as the collective-bargaining
representative of Respondents' lessee drivers; to
apply retroactively the terms and conditions of their
collective-bargaining contract with the Union to the
lessee drivers; and to make whole any employees
covered by the contract for any financial losses
sustained by them as a result of Respondents'
unlawful refusal to apply the terms of the collective-
bargaining agreement to the lessee drivers, with
backpay to be computed on a quarterly basis in the
manner set forth in F. W. Woolworth Company, 90
NLRB 289 (1950), with interest thereon at the rate of
6 percent per annum, as set forth in Isis Plumbing &
Heating Co., 138 NLRB 716 (1962).
Respondents will further be directed to bargain
with the Union about its decision to institute a
leasing program and to furnish the Union with the
information it requested.
CONCLUSIONS OF LAW
1. Respondents Yellow Cab Company and
Checker Taxi Company, Inc., are employers engaged
in commerce within the meaning of Section 2(6) and
(7) of the Act.
2. Local 777, Democratic Union Organizing
Committee, Seafarers International Union of North
America, AFL-CIO, is a labor organization within
the meaning of Section 2(5) of the Act.
3. All chauffeurs employed by Yellow Cab
Company, excluding all executive employees, clerical
employees, and all other employees, guards, and
supervisors as defined in the Act, and all chauffeurs
employed by Checker Taxi Company, Inc., excluding
all executive employees, clerical employees, and all
other employees, guards, and supervisors as defined
in the Act, constitute units appropriate for the
purpose of collective bargaining within the meaning
of Section 9(b) of the Act.
4. At all material times herein the Union has been
the collective-bargaining representative of the em-
ployees in the above appropriate units within the
meaning of Section 9(a) of the Act.
5. By refusing to recognize and bargain with the
Union as the collective-bargaining representative of
Respondents' lessee drivers, Respondents Yellow
and Checker have engaged in unfair labor practices
within the meaning of Section 8(a)(5) and (1) of the
Act.
6. By refusing to apply the terms of their
outstanding collective-bargaining agreement with the
Union to the lessee drivers, Respondents have
1334
YELLOW CAB COMPANY
engaged in unfair labor practices within the meaning
of Section 8(a)(5) and (1) of the Act.
7. By unilaterally and without the agreement of
the Union changing the terms and conditions of
employment of their unit employees through institu-
tion and operation of a leasing plan and by refusing
to bargain over the decision to lease, Respondents
have engaged in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act.
8. By failing and refusing to provide the Union
with certain requested information, Respondents
have engaged in unfair labor practices within the
meaning of Section 8(a)(5) and (I) of the Act.
9. Respondent Checker has engaged in and is
engaging in unfair labor practices within the meaning
of Section 8(a)(1) and (5) of the Act, by instituting its
new take-home program without giving the Union
either notice or an opportunity to bargain about the
matter, and by bypassing the Union and dealing
directly with its employees concerning a mandatory
subject of bargaining.
10. The aforesaid unfair labor practices affect
commerce within the meaning of Section 2(6) and (7)
of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that:
A. Respondent Yellow Cab Company, Chicago,
Illinois, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain with the
Union as the collective-bargaining representative of
its lessee drivers.
(b) Refusing to apply the terms of the outstanding
collective-bargaining agreement with the Union to
the lessee drivers.
(c) Unilaterally and without the agreement of the
Union changing the terms and conditions of employ-
ment of its unit employees through institution and
operation of a leasing plan.
(d) Refusing to bargain with the Union concerning
the decision to institute a leasing plan.
(e) Failing and refusing to provide the Union with
certain requested information necessary to the
administration of the contract.
(f) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
their rights under Section 7 of the Act.
2. Take the following affirmative action:
17 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
(a) Recognize and bargain with the Union as the
collective-bargaining representative of its lessee
drivers.
(b) Retroactively apply the terms and conditions of
its collective-bargaining agreement with the Union to
the lessee drivers.
(c) Make whole, as set forth in the "Remedy," any
employees covered by its collective-bargaining agree-
ment for any and all financial losses sustained by
them as a result of its unlawful refusal to apply the
terms of the collective-bargaining agreement to the
lessee drivers.
(d) Bargain with the Union concerning its decision
to institute a leasing plan.
(e) Upon request, furnish the Union with the
information it requested on June 30 and July 17,
1975.
(f) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to effectuate the administra-
tion of this Order.
(g) Post at its Chicago, Illinois, places of business
copies of the attached notices marked "Appendix A"
and "Appendix B," respectively.17 Copies of said
notices, on forms provided by the Regional Director
for Region 13, after being duly signed by Respon-
dents' representatives, shall be posted by Respondent
Yellow Cab immediately upon receipt thereof, and
be maintained by it for 60 consecutive days thereaf-
ter, in conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by Respondent Yellow Cab
to insure that said notices are not altered, defaced, or
covered by any other material.
(h) Notify the Regional Director for Region 13, in
writing, within 20 days from the date of this Order,
what steps Respondent Yellow Cab has taken to
comply herewith.
B. Respondent Checker Taxi Company, Inc.,
Chicago, Illinois, its officers, agents, successors, and
assigns, shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain with the
Union as the collective-bargaining representative of
its lessee drivers.
(b) Refusing to apply the terms of the outstanding
collective-bargaining agreement with the Union to
the lessee drivers.
(c) Unilaterally and without the agreement of the
Union changing the terms and conditions of employ-
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
1335
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment of its unit employees through institution and
operation of a leasing plan.
(d) Refusing to bargain with the Union concerning
the decision to institute a leasing plan.
(e) Failing and refusing to provide the Union with
certain requested information necessary to the
administration of the contract.
(f) Refusing to recognize and bargain collectively
with the Union, as the exclusive bargaining represen-
tative of its employees in the appropriate unit, by
making unilateral changes in its policies or practices
with respect to the privileges of its chauffeur
employees to take their assigned taxicabs home with
them, without first notifying and bargaining with the
Union about such changes.
(g) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
their rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action:
(a) Recognize and bargain with the Union as the
collective-bargaining representative of its lessee
drivers.
(b) Retroactively apply the terms and conditions of
its collective-bargaining agreement with the Union to
the lessee drivers.
(c) Make whole, as set forth in the "Remedy," any
employees covered by its collective-bargaining agree-
ment for any and all financial losses sustained by
them as a result of its unlawful refusal to apply the
terms of the collective-bargaining agreement to the
lessee drivers.
(d) Bargain with the Union concerning its decision
to institute a leasing plan.
(e) Upon request, furnish the Union with the
information it requested on June 30 and July 17,
1975.
(f) Upon request, bargain collectively with the
Union concerning Respondent's policies and practic-
es with respect to the privileges of its chauffeur
employees to take their assigned taxicabs home with
them.
(g) Rescind, if requested by the Union, Respon-
dent's program of permitting certain employees to
enjoy such privileges if they pay a fee and sign a form
which establishes certain rules and restrictions
governing that privilege.
(h) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to effectuate the administra-
tion of this Order.
(i) Post at its Chicago, Illinois, places of business
copies of the attached notices marked "Appendix A"
1i See fn. 17, supra.
19 See also Barowood, Inc., 209 NLRB 19 (1974); and Greater Houston
and "Appendix B," respectively.18 Copies of said
notices, on forms provided by the Regional Director
for Region 13, after being duly signed by Respon-
dents' representatives, shall be posted by Respondent
Checker immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter,
in conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by Respondent Checker to
insure that said notices are not altered, defaced, or
covered by any other material.
(j) Notify the Regional Director for Region 13, in
writing, within 20 days from the date of this Order,
what steps Respondent Checker has taken to comply
herewith.
MEMBER PENELLO, dissenting:
In accordance with the precedent established in
Columbus Green Cabs, Inc., 214 NLRB 751 (1974),'9
I conclude, contrary to the majority opinion, that the
lessee taxicab drivers are independent contractors,
not employees, within the meaning of Section 2(3) of
the Act.
The majority opinion attempts to distinguish this
case from Columbus Green Cabs despite the fact that
they are virtually indistinguishable. The following
similarities exist in both cases: the Companies
provide the taxicab, maintenance thereon, as well as
licenses, fees, taxes, and insurance; the Companies
make no deductions for Federal, state, or local taxes;
the lessee driver provides his own gas; the lease
agreement expressly disavows the creation of an
employer-employee relationship; there are no pre-
scribed or required hours of work for the drivers; the
drivers are not required to report their location; the
lessees are required to inspect their vehicles for
mechanical defects at the beginning of the lease
term; the lessee is not permitted to sublease to any
other person; the Companies will not refuse to
execute a lease because of a customer complaint
unless the complaint relates to unsafe driving; and
the lessee agrees to operate the taxicab in conformity
with all applicable laws.
Moreover, most of the factors upon which the
majority relies in distinguishing this case from
Columbus Green Cabs are not, in my opinion,
indicative of an employer-employee relationship. For
example, the majority cites the 250-mile-per-lease
limit on drivers and the requirement that drivers
have all repairs on cabs performed at the Companies'
garages. These factors, however, more likely repre-
sent the Companies' efforts to preserve the life of the
taxicabs they own and keep down the cost of repairs,
rather than their attempts to restrict drivers' earnings
Transportation Company and All Other Employers d/b/a Yellow Cab
Company, 208 NLRB 1020(1974).
1336
YELLOW CAB COMPANY
or prevent subleasing, as asserted in the majority
opinion. Moreover, by offering day and night leases,
the Companies do not, as the majority contends,
prescribe the drivers' hours of work. For, as their
opinion also indicates, the Companies offer a 24-
hour lease as well, as was the case in Columbus Green
Cabs.
Furthermore, the majority cites the existence of a
provision in the lease making compliance with the
pervasive scheme of municipal regulations a condi-
tion thereof. However, this provision was also
present in Columbus Green Cabs.2 0 The majority
asserts that this provision allows the Companies to
exercise effective control over all matters covered by
the regulations. But, the actual effect is just the
opposite-it constitutes an abdication by the Com-
panies of control over such matters in favor of the
municipal authorities.
In sum, the facts in the instant case are virtually
indistinguishable from Columbus Green Cabs, and, as
in that case, the facts herein support a finding that
the lessee taxicab drivers are independent contrac-
tors, rather than employees. Accordingly, I would
dismiss that part of the complaint filed in this case
which alleges that the Companies refused to recog-
nize the Union as the collective-bargaining represent-
ative of the Companies' lessee drivers and unilateral-
ly changed the terms and conditions of employment
of those taxicab drivers. 21
20 Although in this case the Companies have the explicit right to
terminate a lease for failure to comply with the municipal regulations, rather
than an implicit right as existed in Columbus Green Cabs, in both practical
and legal terms there is no real difference.
21 However, I agree with my colleagues that the Respondents violated
Sec. 8(a)(5) by refusing to bargain with the Union about their decision to
lease taxicabs to drivers, and by refusing to furnish the Union with certain
information requested by it relating to the Companies' decision to lease the
taxicabs.
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT unilaterally and without the
agreement of the Union change the terms and
conditions of employment of the unit employees
through institution and operation of a leasing
plan.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed by Section
7 of the Act.
WE WILL recognize and bargain with the Union
as the collective-bargaining representative of our
lessee drivers.
WE WILL retroactively apply the terms and
conditions of our collective-bargaining agreement
with the Union to our lessee drivers.
WE WILL make whole any employees covered
by our collective-bargaining agreement with the
Union for any financial losses they sustained as a
result of our unlawful refusal to apply the terms
of our collective-bargaining agreement to the
lessee drivers.
WE WILL bargain with the Union concerning
our decision to institute a leasing plan.
WE WILL, upon request, furnish the Union with
certain information we unlawfully refused to
supply.
YELLOW CAB COMPANY
APPENDIX B
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT unilaterally and without the
agreement of the Union change the terms and
conditions of employment of the unit employees
through institution and operation of a leasing
plan.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed by Section
7 of the Act.
WE WILL recognize and bargain with the Union
as the collective-bargaining representative of our
lessee drivers.
WE WILL retroactively apply the terms and
conditions of our collective-bargaining agreement
with the Union to our lessee drivers.
WE WILL make whole any employees covered
by our collective-bargaining agreement with the
Union for any financial losses they sustained as a
result of our unlawful refusal to apply the terms
of our collective-bargaining agreement to the
lessee drivers.
WE WILL bargain with the Union concerning
our decision to institute a leasing plan.
WE WILL, upon request, furnish the Union with
certain information we unlawfully refused to
supply.
WE WILL, upon request, bargain with the Union
concerning our policies and practices with respect
to the privileges of our chauffeur employees to
take their assigned cabs home with them.
WE WILL rescind, if requested by the Union,
our program of permitting certain employees to
1337
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
take their assigned cabs home with them if they
pay a fee.
CHECKER TAXI
COMPANY, INC.
DECISION
STATEMENT OF THE CASE
MARVIN ROTH, Administrative Law Judge: These conso-
lidated cases were heard at Chicago, Illinois, on February 2
through 6 and March 8 through 11, 1976. The original
charges in Cases 13-CA-14142 and 14143 were filed on
March 26, 1975, and amended on June 20, July 8, and
August 1, 1975. The charge in Case 13-CA-13973 was filed
on February 5, 1975. All of the charges were filed by Local
777, Democratic Union Organizing Committee, Seafarers
International Union of North America, AFL-CIO (herein
the Union).' The complaint in Cases 13-CA-14142 and
14143 (herein sometimes referred to as the leasing case),
which issued on November 20, 1975, alleges that Yellow
Cab Company and Checker Taxi Company, Inc. (herein
respectively Yellow and Checker and, collectively, the
Companies or Respondents), since on or about July 1,
1975, have been and are violating Section 8(a)(5) and (I) of
the National Labor Relations Act, as amended, by refusing
to recognize and bargain with the Union, refusing to apply
and give effect to the outstanding collective-bargaining
agreement with the Union, unilaterally and without the
agreement of the Union changing the terms and conditions
of employment of unit employees, and refusing to supply
requested information necessary to the administration of
the agreement; said allegations being related to the
Companies' actions in inaugurating, instituting, and main-
taining a practice of providing taxicabs to chauffeurs under
leasing agreements with individual chauffeurs. The com-
plaint in Case 13-CA-13973 (herein sometimes referred to
as the take-home case), which issued on May 30, 1975, and
which in subject matter is unrelated to the leasing case,
concerns a practice which was instituted by Checker in
February 1975 whereby driver employees who met certain
qualifications were permitted to take cabs home with them
by paying $10 per week. The complaint alleges that
Checker thereby violated Section 8(a)(5) and (1) of the Act
by unilaterally changing existing conditions of employment
without prior notice to or bargaining with the Union, and
I In their answers to the respective complaints, Respondents admitted
that the charges were filed by the Union, thereby precluding litigation as to
whether Union Vice President Alonzo Polk, who signed the charges, was
authorized to do so by the Union. Moreover, it is settled law that such a
question is irrelevant to the determination of the merits of an unfair labor
practice complaint. Any person, whether or not authorized by his employer
or organization, may file a charge, and by that act he invokes the Board's
jurisdiction to investigate, hear, and determine alleged unfair labor
practices. See Sec. 10(b) of the Act. As the Supreme Court held in N.L.R.B.
v. Indiana & Michigan Electric Company, 138 U.S. 9, 18 (1943): "The charge
is not proof. It merely sets in motion the machinery of an inquiry. When a
Board complaint issues, the question is only the truth of its accusations. The
charge does not even serve the purpose of a pleading. Dubious character,
evil or unlawful motives, or bad faith of the informer cannot deprive the
Board of its jurisdiction to conduct the inquiry." Assuming, arguendo, that
Respondents sought to show that there was a difference of opinion among
the Union's membership as to leasing, or even that a majority did not
oppose leasing, that also would be irrelevant to the present case. If, as
by bypassing the Union and bargaining directly and
individually with its employees. The Company's answers
deny the commission of the alleged unfair labor practices.
All parties were afforded full opportunity to participate, to
present relevant evidence,2 to argue orally, and to file
briefs.
Upon the entire record in the case 3 and from my
observation of the demeanor of the witnesses, and having
considered the briefs submitted by the parties, I make the
following:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENTS
Yellow, a Maine corporation, and Checker, a New York
corporation, whose offices and places of business are in
Chicago, Illinois, have at all times material been engaged in
the business of providing taxi service to the public. In the
operation of their respective businesses, Yellow and
Checker each annually purchases and receives goods and
materials valued in excess of $50,000 directly from points
outside of Illinois for use in its business in Illinois. I find (as
Checker admits in its answer in Case 13-CA-13973) that
Checker and Yellow are both employers engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
111. THE ISSUES
The threshold and principal issue in the leasing case is
whether the lessees of taxicabs are employees within the
meaning of the Act, or whether, as contended by the
Companies, they enjoy another status, either that of
independent contractors or bailees of working tools, i.e.,
the cabs, which would place them outside the ambit of
Sections 2(3) and 8(a)(5) and (I) of the Act and,
consequently, of the collective-bargaining units represented
by the Union. Indeed, it is the position of General Counsel
that this is the "crux" and only substantial issue in the case,
contended by General Counsel, the lessees are covered by the current
collective-bargaining contracts between Respondents and the Union, then it
would make no difference for the purpose of this case whether or not some
or even all of the lessees were happy with that status quo, for Sec. 8(b) of the
Act precludes modification or termination of a collective-bargaining
contract except under circumstances not here present. Rather, at an
appropriate time and in an appropriate manner, Respondents or the drivers
might have raised the question of separate or no representation by the
Union. If, on the other hand, the lessees are not covered by the contracts,
then General Counsel's case would fail in any event.
2 The Companies' contrary assertion in this record is discussed at
pertinent portions of this Decision.
3 Pursuant to my order to show cause, I am hereby directing that the
transcript of proceedings be corrected as set forth therein. Other corrections
have been made pursuant to previous orders. I have found it unnecessary to
rule on the Union's belated motion to correct the transcript. However, as the
motion is unopposed, I am proceeding on the assumption that the proposed
corrections are warranted.
1338
YELLOW CAB COMPANY
and he concedes that if the lessees are independent
contractors his complaint should be dismissed. 4 However,
the Union has advanced an alternative contention. The
Union contends that even if the lessees are determined to
be independent contractors the Companies nevertheless
violated Section 8 (aX5) and (1) by failing and refusing to
bargain in good faith over the matter of leasing, which in
the Union's view "diminish[es] and violat[es] the integrity
of the bargaining unit" of commission drivers who are
undisputedly employees subject to the Act and to the
collective-bargaining contract. Implicit in this contention
are the subsidiary questions of whether the Companies
failed or refused to bargain in good faith over the matter of
leasing, whether leasing involves the contracting out or
diminution of unit work, and whether the Companies'
decision to engage in leasing was a business decision about
which they were not required to bargain. For their part, the
Companies contend that even if the lessees are found to be
employees the complaint should fail because the Compa-
nies fulfilled their bargaining obligations toward the
Union, and because "the lessee groups cannot be consid-
ered accretions to the units of commission drivers" and
therefore are not within the recognized bargaining unit.
The take-home case involves consideration of the questions
of whether the Company's actions in instituting the $10
take-home charge involved a mandatory subject of collec-
tive bargaining, whether Checker thereby violated any
bargaining obligation, and whether, if the answer to either
of the first two questions is affirmative, the Union waived
any obligation to bargain.5
I shall deal first with the leasing case. The principal issue
in this case is governed by the time honored "right-of-
control test" which was recently restated by the Board in
Twin City Freight, Inc., S & B Nelson, Inc., 221 NLRB 1219,
1220 (1975):
The Board applies the common law right-of-control
test in determining whether individuals are employees
or independent contractors. [Citing N.LR.B. v. United
Insurance Co. of America, 390 U.S. 254 (1968).] Under
this test, an employer-employee relationship exists
when the employer reserves not only the right to
control the result to be achieved, but also the means to
be used in attaining the result. On the other hand,
where the employer has reserved only the right to
control the ends to be achieved, an independent
contractor relationship exists. It is clear that applica-
tion of this test is not a "perfunctory exercise." In order
to determine the nature of the relationship, the Board
analyzes the facts presented in the particular case,
4 General Counsel has not come forward with any alternative basis on
which the complaint could be sustained, absent a finding that the lessees are
employees. I consider this to indicate the view of General Counsel that,
absent such a finding, the complaint may properly be dismissed.
I I agree with General Counsel that deferral of either the leasing case or
the take-home case pursuant to the doctrine of Collyer Insulated Wire. A
Gulf and Western Svstems Co., 192 NLRB 837 (1971). is not warranted for
several reasons. First, the Companies neither pleaded nor attempted to
litigate affirmatively a Collyer defense. Nedeo Construction Corp.. 206 NLRB
150 (1973). Rather, their counsel took the position at the hearing, in
response to my inquiry, that deferral was a matter within the Board's
discretion. The Companies' oblique criticism in their bnef of General
Counsel's handling of the take-home case falls short of constituting an
balances them, and arrives at a result. [Citation
omitted.]
IV. THE ALLEGED UNFAIR LABOR PRACTICES: THE
LEASING CASE
A. Background.' the Nature of the Companies'
Operations; Municipal Regulation and Control of the
Taxicab Industry; the Collective-Bargaining
Relationship Between the Companies and the Union;
and the Commission Operations
Pursuant to provisions of the Municipal Code of the City
of Chicago (Chs. 21-1 through 21-4 and 28) the Public
License Vehicle Commissioner (herein Vehicle Commis-
sioner) of that city was, until December 1975, empowered
to issue licenses to operate taxicabs, to adopt rules,
regulations, and orders for the purpose of administering all
ordinances relating to public passenger vehicles, and to
control the administration and enforcement of such
ordinances. In December 1975, those powers were trans-
ferred to the Office of the Commissioner of Consumer
Sales, Weights and Measures, herein Consumer Commis-
sioner. When speaking of the powers of either office, I shall
refer to the Commissioner. One license is issued for each
taxicab, and that license is evidenced by a medallion and
by a license card which are each required to be displayed
on the cab. The number of licenses, and consequently the
number of cabs in Chicago, is based on a determination of
public convenience, necessity, and safety, except that
absent cancellation, surrender, or revocation a licensee is
entitled to operate the same number of cabs for which he
held licenses in 1963. At all times material, there have been
and are 4,600 licenses issued and renewed annually, of
which Yellow holds 2,166 and Checker holds 1,500. The
remaining 934 are issued to various smaller companies or
to owner-operators. Although (at least as of July 1976) the
licensee was not required to be the owner of its cabs,
Checker and Yellow each own all of their respective
vehicles. Their cabs all uniformly bear the distinctive color
and design of their respective Company, and each bears the
name of the Company and a telephone number at which
prospective passengers may order a cab. In sum, the cabs
in each fleet are identical in appearance. Each Company
conducts a single integrated operation furnishing cab
service in the city of Chicago; indeed, Checker President
Feldman so testified with respect to his Company. Each
Company has a single hierarchy of officials and manage-
ment personnel, a single complement of administrative
personnel, liability, and public damage insurance policies
covering its entire fleet, a workmen's compensation and
adequate and timely Collyer defense. James W. Whirfield d/b/a Currten
Supermarket. 220 NLRB 507, 509, fn. 19 (1975). Additionally, Checker in
correspondence with the Regional Director, and Respondent's counsel in
response to my inquiry at the hearing indicated their position that a timely
grievance could not now be filed over the take-home and leasing issues,
respectively. Therefore, absent a waiver of the asserted time limitations (and
there has been no waiver), deferral is not warranted. The Bunker Hill
Company, 208 NLRB 27, 35 (1973). The leasing case involves questions
which are peculiarly within the Board's province and not appropriate for
deferral to arbitration, i.e., the composition of a Board-certified collective-
bargaining unit, and the applicability of the Act to a particular class of
persons. See Commonwealth Gas Company, 218 NLRB 857 (1975).
1339
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employer liability policy covering all of its locations, one
central garage for major repairs to its vehicles, one
telephone number for prospective customers and another
for reporting accidents and obtaining towing or road repair
for its cabs, and a central log of such emergency calls. The
management of each Company decides how many new
vehicles shall be purchased for the entire fleet, and how
many, when, and which cabs shall be assigned or
transferred to a garage, whether lease or commission. Each
Company maintains a single radio dispatch service;
however, none of the leased cabs have radios, and only
some of the commission cabs are so equipped. In
advertising to the consumer public, the Companies make
no distinction between commission and leased cabs;
however, as will be discussed, a distinction may be made
when dealing with passenger complaints.
Checker and Yellow are corporate entities within a
conglomerate of firms engaged in the business of transport-
ing passengers for hire or in furnishing products or services
for that industry. Checker owns a controlling interest in
Checker Motors, which manufactures cabs. Checker
Motors owns subsidiaries engaged in the taxicab business
in various cities, including Yellow which is a wholly owned
subsidiary. Other subsidiaries owned or controlled by
Checker Motors distribute cabs, furnish insurance, gaso-
line, or parts, or are engaged in providing limousine
service. Checker and Yellow management cooperate and
work closely together in conducting their respective
operations. Yellow Board Chairman Robert Samuels
testified that the manners in which Yellow and Checker
conduct their respective commission operations are sub-
stantially identical. Therefore, absent specific evidence to
the contrary, I have proceeded on the assumption that
evidence concerning the manner of one firm's commission
operations would also be applicable to the other.
Chapter 28-9 of the Municipal Code provides that the
relation between the licensee and the driver of a cab may
be such as mutually agreed upon by contract, provided that
the driver is licensed as a public chauffeur as required by
ordinance. However, the Municipal Code and the rules and
regulations promulgated by the Commissioner pursuant to
the code impose intensive and detailed controls upon the
taxicab business, including both licensee and driver, which
cover virtually every aspect of that business. Violations
subject the licensee or driver to penalties, e.g., suspension
or loss of license. Initially, the driver must obtain, in
addition to his driver's license, a public chauffeur's license,
and this is no mere perfunctory exercise. He must fill out
an application, pass a vision and hearing test and
questionnaire concerning possible physical disabilities, be
subjected to a police investigation of his character, pay a
fee, and pass an examination on his knowledge of local
geography and traffic and taxicab ordinances. Many of the
regulations imposed upon the driver are such as might
6 The Supreme Court of Illinois has interpreted this requirement as in
effect nullifying the provision of Code ch. 28-9 referred to above, by
imposing upon the proprietor of the cab and the driver an employer-
employee relationship, at least for the purpose of workmen's compensation
coverage. Penny Cab Co. v. Industrial Commission, 60 111. 2nd 217, 326 N.E.
2nd 393 (1975). The significance of the cited case will be discussed at a
subsequent point in my Decision.
T The Union has requested that I take judicial advice of the fact that
otherwise be associated with an employer-employee rela-
tionship. At least until July 1976 the code and regulations
were silent as to whether the licensee was responsible for
the derelictions of the driver. However, some of the
regulations implicitly impose an obligation on both
licensee and driver, and indicate that the licensee might be
held liable for such derelictions. For example, the code
provides that "every taxicab shall be operated regularly to
the extent reasonably necessary to meet the public demand
for service" and that discontinuance of service may result
in revocation of the cab license. Thus, if a driver, whether
he be a commission driver or lessee, chose to utilize a
taxicab in order to enable him to spend his days at the
racetrack, Checker or Yellow might as a consequence lose
its license to operate that cab. Among the myraid of duties
and restrictions and regulations imposed upon the driver
are those governing the rates of fare and the use of the
meter, and regulations governing the use of cab lines. The
driver must be courteous, present a neat appearance, pay
strict attention to his cab, keep the cab in clean condition,
and report lost articles. His meter must be in the proper
position, i.e., he cannot carry passengers without charging
the proper fare. The driver cannot refuse service except
under certain limited circumstances. The code also con-
tains restrictions or prohibitions on group riding, passen-
gers riding in the front seat, the giving of misinformation,
soliciting, taking passengers to the wrong destination,
overcharges, loitering, or gambling near the cab. The
Commissioner and the Department of Aviation of the City
of Chicago have also promulgated detailed regulations
governing the operation of taxicabs at O'Hare Airport. The
code further requires that the owner of the cab (cabman)
"carry public liability and property damage insurance and
workmen's compensation insurance for his employees." 6
The testimony of witnesses indicates that the code and
regulations are vigorously enforced by the Commissioner's
office. Cabdrivers are fully aware that a complaint from the
public, e.g., of refusal to accept a passenger, rude behavior,
or careless driving, might well result in a reprimand or, if
an aggravated or repeated offense, in a suspension of
license. As indicated, the regulations also cover numerous
aspects of the drivers' work which, in a different context,
might normally be dealt with by the drivers' employer. As
will be discussed in connection with the leasing operation,
these factors have created a situation whereby Yellow and
Checker have been able, in fact, to abdicate control over
the drivers' activities in those areas covered by the
regulations, i.e., virtually every aspect of the drivers'
activities, except insofar as such control may be necessary
to protect the profitability of the Companies' operations
and their property, and to protect them from liability at
law.7
Yellow has been engaged in business for over 60 years,
and Checker since 1951. Prior to July 1, 1975, each
subsequent to the hearing in this case the Commissioner promulgated
certain new regulations which are currently scheduled to take effect on
August 1, 1976. These regulations provide in pertinent part that the licensee
(I) must be the owner of the vehicle, (2) can permit only a licensed chauffeur
to operate his vehicle, (3) must keep an accurate record of the fares collected
by each driver, and (4) that he must require the chauffeur to wear a dark-
hued uniform and a name tag. The significance of these new regulations will
be discussed, infra.
1340
YELLOW CAB COMPANY
Company operated exclusively with a commission system,
whereby the drivers were paid, in accordance with a fixed
schedule, a percentage of their bookings, i.e., money taken
in on the meter. Following an election conducted pursuant
to a Board Decision and Direction of Election in a
consolidated unfair labor practice and representation case
(Checker Taxi Co., et al, 131 NLRB 611 (1961)),8 the Union
was certified as the collective-bargaining representative of
the Companies' employees in four separate units, viz,
Checker chauffeurs, Yellow chauffeurs, Checker garage
employees, and Yellow garage employees. It is the first two
units which are involved in this case, specifically: (I) all
chauffeurs employed by Checker, but excluding all execu-
tive employees, clerical employees, and all other employ-
ees, guards, and supervisors as defined in the Act, and (2)
all chauffeurs employed by Yellow, with the same exclu-
sions. Since 1962, the parties have negotiated and executed
a series of collective-bargaining contracts covering the
respective chauffeur units, the most recent of which is
effective from June 1, 1974, to May 31, 1977. It has been
the uniform practice of the parties to negotiate the
contracts in joint session, and to arrive at a single contract,
but to execute separate, albeit, identical documents for
each Company. In their negotiations and other dealings
with the Union, both Companies have been represented by
the same attorney.
As of June 30, 1975, Checker had 761 full-time and 1,900
part-time drivers on its payroll, and Yellow had a slightly
higher number of drivers in each category.9 The collective-
bargaining contract provides that the drivers shall receive
commissions in accordance with a schedule of rates set
forth in the contract. For this, if for no other reason, the
contract precludes any leasing arrangement for the drivers
within the bargaining units. Moreover, the contract
contains numerous other provisions, e.g., those governing
hours of work, grounds for suspension or layoff, pension
plan, and vacations, which are inconsistent with any
relationship other than that of employer and employee, or
inconsistent with the present leasing arrangements, or
inconsistent with both.
Checker President Feldman and Yellow Board Chair-
man Samuels testified in considerable detail as to the
manner in which the Companies control the work of their
commission drivers. Their testimony was corroborated in
various material respects by witnesses of all parties, and by
documentary evidence. With minor qualifications, I have
no reason to disbelieve their testimony in this regard.
Initially, a prospective commission driver must complete a
lengthy job application form which calls for information
concerning his physical description, relatives, telephone
number for emergencies, names of five references, work
history, education, physical disabilities, and driving record.
If the applicant does not have a chauffeur's license from
the city of Chicago, he must go through the application
procedure described above. Although the Commissioner
8 The unfair labor practices found therein are remote in time and far
removed from the circumstances of the present case, and since 1961 there
has been a lengthy history of collective bargaining between the parties.
Therefore. I have not taken that conduct into consideration in determining
the present case.
9 Yellow offered in evidence, but never substantiated as authentic, a
purported tabulation of the number of full-time drivers on its payroll at 6-
does not administer a general physical examination, the
Companies may require such an exam if the information
on the application indicates that an exam is necessary. If
the applicant is accepted for employment, he will be
assigned to a garage and told when to report, e.g., if on day
shift, before 7:30 a.m., or if on night shift, between 4 and 6
p.m. The driver signs a pension fund authorization and an
instruction sheet. By signing the latter the driver acknow-
ledges that he has read and understands the Company's
rules. Some of these rules are contained in a rule book
which is issued to each driver; in addition, other rules may
be promulgated from time to time, either orally or in
writing. The collective-bargaining contract provides that
the Company may suspend or discharge a driver for
habitual irregularity of attendance or failure to observe
written company rules. Some provisions of the rule book
deal with municipal regulations, insurance policy require-
ments and the use of company property. However, the rule
book also governs numerous other matters. The Yellow
rules are illustrative. The rules require regular attendance
and promptness, and a driver must give advance notice if
he intends to be absent for 6 days or more. Part-time
drivers must work at least two shifts per week, and may be
and sometimes are required to work on weekends. Drivers
are required to obey supervisors, including dispatchers, and
cannot use company time for personal or other than
company business. The drivers are instructed not to push
other cars either by hand or with the cab, or to eat during
the rush hour, or to use personal radios in the cab, or to
argue about the tip, or to smoke in the cab. The driver is
required to assist passengers with luggage, to call out the
destination, to remind passengers about seat belts, and at
night to remain until unescorted women or children are
inside their door. Of particular significance (as will be
discussed further) are the requirements that the driver
complete his trip sheet, accurately and fully recording all
trips and charges, and must turn in his receipts at the end
of his shift. Additional rules may be promulgated from
time to time, e.g., during the 1973 gasoline shortage, drivers
were admonished not to idle their engines or drive too fast.
The Checker rule book contains detailed instructions on
the use of the radio dispatch service, and a requirement
that the driver take radio calls. In fact, this requirement is
not enforced. Although at one time drivers with radio-
equipped cabs were required, as a condition of keeping
such cabs, to accept at least three radio calls per day, most
garage managers no longer enforce such a requirement.
One's own experience as a passenger might suggest that not
all of the Companies' rules are uniformly or vigorously
enforced. However, the testimony of Company Officials
Feldman and Samuels indicate that they regard with the
utmost importance the requirement of complete and
accurate entries on the trip sheet.
The Companies do not have a formal program for
training new drivers; rather, their view is that the driver's
month intervals during the period from January 1970 to January 1976. At
the Union's request, a similar tabulation of part-time drivers was also placed
in evidence. In any event, the size of Yellow's fleet, and the fact that it
presently has eight functioning commission garages, whereas Checker has
seven, would suggest that Yellow probably has a slightly larger complement
of employees than Checker.
1341
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ability to become a successful cabdriver must be developed
through his experience on the job. However, when the
driver reports to his new job and is assigned his first cab, he
is instructed in the procedures of the Company's operation.
First, he will be told how to operate the meter (a relatively
simple operation), if he does not know already. The driver
is also instructed as to how to fill out the trip sheet, and to
follow the correct procedure at the end of his shift, viz, to
fill up the tank, complete the trip sheet, calculate his net
revenue, place his receipts in a neat and orderly fashion in
an envelope (the trip sheet being a form for the entry of
data on the face of the envelope), park the cab in a
designated space, and turn in the trip sheet and accompa-
nying receipts at the garage cashier's office. The driver will,
if he wishes, be assigned a locker.
The trip sheet is, as Checker President Feldman testified,
the Companies' principal means of controlling the driver in
order to determine whether he is doing his job properly. '°
The driver is required to fill in the data which is recorded
on his meter, i.e., total miles, paid miles, the number of
units of fare (fractions of miles), trips, and extras, the extras
being additional passengers for which a supplemental fare
is collected. The driver must also enter the starting time
and place of each trip, number of passengers, destination,
arrival time, and fare, and he must record all "flat rates,"
i.e., fixed rate, such as 1-1/2 times the meter reading, for
certain suburban destinations, which is designed to
compensate the cabman for the unpaid miles on his return
trip. The rate for extras and the flat rates are established by
municipal ordinance. The driver must also enter on his trip
sheet his time in and time out, tabulation of revenues, and
amount of gas used. He must also record accidents;
however, in the ordinary course of events he will have
already reported any accident to the Company.
From the outset of their employment, the Companies
emphasize to their drivers the importance of bringing in the
maximum possible revenue at the least possible expense to
the Company. To these ends, the testimony of witnesses for
both sides indicates that the Companies expect their drivers
to bring in a minimum of about $50 per shift and a
minimum average of about 45 cents per mile, the exact
minimum varying slightly, depending upon the discretion
of the garage manager. The driver is also expected to get 10
miles per gallon of gas, and his failure to do so will be
checked for a determination if the cab is defective or if the
driver is siphoning off gas. The collective-bargaining
contract provides that the Companies may suspend or
discharge a driver for consistent low bookings or consistent
excessive unpaid mileage or gasoline consumption. The
Company views the failure of a driver to attain the above
goals within a reasonable period of time as indicating his
inability to become a successful cabdriver and, consequent-
ly, it may discharge such an individual. Information
obtained from the trip sheet is the principal means for
making such determinations. The garage manager reviews
the trip sheets, and the data is summarized and entered on
a so-called "hard card," which indicates the drivers'
'o Feldman testified that about 90 percent of the Company's complaints
against drivers, and about 95 percent of its disciplinary actions, stem from
information obtained from the trip sheets. Checker Garage Manager John
Balsamo testified initially that about 50 percent of such complaints arose
from the trip sheet, but later changed this figure to 80 percent. Whatever the
performance record. Management officials, e.g., Checker
Vice President Collins, periodically review the hard cards.
Either on the garage manager's own initiative or at the
behest of a management official, a driver may be
summoned for an interview about his poor performance.
The manager will point out areas for improvement, e.g.,
trips which indicate excessive deadheading. In short, the
drivers' performance with respect to bookings and mileage
is the lifeblood of the Companies' commission operations,
and their failure to achieve satisfactory performance in this
regard may spell the difference between profit and loss.
Another major area of company concern relates to
cheating on revenues, e.g., "high flagging" (carrying
passengers without running the meter), and failing to
report extras or flat rates. High flagging is prohibited both
by city regulation and company rule; however, this and
other forms of cheating are of particular concern to the
Companies, for they mean money taken out of their
respective pockets. In detecting cheating, the trip sheets are
a useful device. For example, the experienced eye of a
garage manager will take note of a driver who consistently
records an unusually low number of extras. Additionally,
in monitoring the work of their drivers, the Companies
utilize the observation reports of their roadmen, informal
observations and reports by managerial and supervisory
personnel, and complaints from the Commissioner's office
or from the general public. The roadmen observe cabs for
high flagging, reckless driving, malingering, and a bad
order cab (damaged or defective), improper dress of the
driver, and extra passengers. If a cab is observed with extra
passengers, the time and location of the trip may be
checked against the trip sheets in order to determine
whether the driver reported the extras. In sum, the
principal areas of company discipline are low bookings,
high mileage, cheating, absenteeism, and tardiness. The
remaining areas, e.g., reckless or careless driving, intoxica-
tion, sloppy appearance or discourtesy, encompass areas
which are closely controlled by the Commissioner's office
or the police.
B. The Advent of Leasing and the June 1975
Meetings Concerning Leasing
Checker President Feldman testified that his Company
embarked upon leasing in the hope of increasing the
profitability of its operation. Yellow Board Chairman
Samuels testified that for him the problem was one of
increasing profitability or limiting costs. During the
hearing General Counsel endeavored to show, through
cross-examination of the officials, that the Companies
embarked upon leasing as a means of ridding themselves of
the Union. I find that General Counsel failed to prove such
motivation. Of course it could be argued that among the
costs which Samuels hoped to limit were the costs of the
union contract. However, neither surmise, suspicion, nor
such syllogistic reasoning is a substitute for hard evidence.
Rather, the evidence presented by the Companies and the
correct figure, it is evident from those areas which are of foremost concern
to the Companies, i.e., low bookings, high mileage, and cheating on
revenues, discussed infra, that the trip sheet is the Companies' principal
means of controlling the work of its drivers.
1342
YELLOW CAB COMPANY
developments which led to leasing tend to indicate that the
Companies were motivated by a desire to improve the
economic posture of their businesses, and that they acted in
a good-faith reliance upon Board decisions and other law
which they interpreted as furnishing a lawful basis for what
they were doing.1I
At the end of 1973, Yellow found itself going into the
red, while Checker was continuing to operate at a profit.
Yellow's financial posture led Samuels and Feldman, in
December 1973, to request a fare rate increase from the
City Council. However, the Council informed them that it
first had to know the outcome of their pending contract
negotiations, as the Companies' collective-bargaining
contracts were scheduled to expire on June 30, 1974. At the
Companies' request, the Union formally proposed and the
Companies agreed to reopen their contract at an earlier
date (May I) in order to enable them to complete their
negotiations prior to the City Council's summer recess. The
Union did not question the need for early negotiations;
indeed, in his letter to Samuels, dated April 2, 1974, Union
President Clark noted that early negotiations were warrant-
ed by "serious conditions" in the industry. However, the
new contract was not signed until July 2-too late for the
Council to act prior to its recess. The subject of leasing was
not discussed in the negotiations. The Companies request-
ed a 25-percent rate increase, and on August 21 the
Council approved a 19-percent increase, effective as of
September i, 1974. Even before the rate increase took
effect, Samuels concluded that the rate increase would not
significantly improve Yellow's financial situation. Accord-
ing to Samuels, Yellow's revenues increased only 4 percent
after the fare increase (of which about 2 percent went for
wages) and the average number of trips per driver per day
dropped by about one and one-half. Samuels concluded
that this drop was the result of a tendency on the part of
drivers to set in advance the amount of money that they
wish to earn each day. Yellow's profit-and-loss statements
indicate that its revenues increased by nearly 10 percent
from 1973 to 1974, but that the Company continued to
suffer a deficit. Checker's profit-and-loss statement indi-
cate that its revenues increased by about 9 percent during
the same period, but the amount of its profit, in dollars,
remained about the same. For 1974, if viewed as a single
entity, the combined operations of Yellow and Checker
just about broke even. Checker introduced in evidence
statistics which indicated that during the period from
January 1, 1973, to June 30, 1975, there had been an
irregular but perceptible decline in the total number of
shifts worked by its drivers. Checker statistics also indicate
that during the same period the number of its full-time
drivers gradually declined, while the number of part-time
drivers increased.
On August 22, 1974, Samuels and Feldman discussed
with their colleagues at Checker Motors the possibility of
leasing taxicabs through wholly owned corporate subsidi-
" At the meeting between the Companies and the Union on June 5,
1975, Union Treasurer Spencer Austin stated that "what you are doing is
going to cost us the Union." Feldman answered that Austin "always gets I
to the heart of the subject," but added that the Checker was hoping to
improve the commission operation, and not planning to abandon it. At the
parties' June 17 meeting, Union Attorney Friedman accused the Companies
of engaging in an effort to get rid of the Union, whereupon Company
aries. The practice of leasing cabs is prevalent in many
areas of the nation, and there has been a trend toward
leasing in recent years. The response was favorable. On
August 26, 1974, without notifying the Union, Feldman
and Samuels went to Vehicle Commissioner Carter and
proposed their plan to operate through two subsidiaries
("Bell" for Yellow and "Comet" for Checker), each with
distinctive color schemes. Carter indicated his approval of
the names and color schemes. Through other officials at
City Hall, the Union got wind of what was afoot. On
August 30, 1974, Union President Clark sent letters to
Samuels and Feldman in which he alleged that Checker
and Yellow might be planning to transfer licenses. Clark
requested specifics, i.e., how many, to whom, and whether
they had talked to public officials; and suggested a
meeting. The Companies did not respond. By letters of
September 20, 1974, Clark requested responses to his
August 30 letters; again, there was no answer. The Union
never followed up on the letters, although the parties met
from time to time on other matters. Union Vice President
Polk testified that he did not know at this time that the
proposed transfers involved leasing. However, his testimo-
ny was impliedly contradicted by Clark. When asked why
he did not follow through on his letters, Clark testified that
he figured that the Companies were going to lease cabs
whether he or the city liked it or not. In fact, in or about
September 1974, the Union went to City Hall and, in the
absence of Mayor Daley, requested the deputy mayor to
disallow the proposed transfers of licenses.
By December 1974, the Companies had developed
detailed plans to lease cabs through Bell and Comet,
including drafts of form leases. The plans contemplated
that the lessees would not be employees of the subsidiaries
for the purposes of the Federal Insurance Contributions
Act, the Federal Unemployment Tax Act, and the income
tax withholding provisions of the Internal Revenue Code.
The standard under these laws, like that under the
National Labor Relations Act, is the common law right-of-
control test. See Party Cab Co. v. United States, 172 F.2d 87
(C.A. 7, 1949), cert. denied 338 U.S. 818 (1949). In
developing their plans, the Companies worked closely with
their attorneys. Samuels testified that the Companies also
consulted with an association of taxicab owners and with
other companies, including some which were engaged in
leasing, e.g., Columbus Green Cabs and Greater Houston
Yellow Cab. On November 7, 1974, the Board issued its
Decision and Order in Columbus Green Cabs, Inc.; Yellow
Cabs, Inc.; Eastside Cab Company, and Radio Cab Compa-
ny, 214 NLRB 751 (1974), holding that the lessees therein
were not employees within the meaning of the Act. These
factors confirm that in developing their plans the Compa-
nies attempted to meet the criteria which were present in
Columbus Green Cabs and in the Board's preceding
decisions in Barwood, Inc., 209 NLRB 19 (1974), and
Greater Houston Transportation Company and All Other
Attorney Haythorne accused Fnedman of engaging in vituperation. In the
total context of the evidence, I do not view Feldman's remark as
demonstrating that the Companies were motivated by union animus.
Rather, his statement is equally compatible with an accusation that this was
all that concerned the union officials. or a prediction that in time most
drivers would opt for leasing as being preferable to commission driving.
1343
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Employers d/b/a Yellow Cab Company, 208 NLRB 1020
(1974), and thereafter embarked upon leasing in the good-
faith belief that they could lawfully do so without the
Union's approval.
While awaiting a reply from Internal Revenue, or
possibly earlier, Yellow and Checker organized the subsid-
iary corporations and, at least in the case of Comet Cab
Company, set aside a former commission garage for use in
the prospective leasing operation. Eventually, this garage
was utilized for the direct leasing by Checker which is a
subject of this case. Again, the Companies did not notify
the Union of their actions, but the Union was monitoring
those actions. On March 19, 1975, Clark sent letters to
Samuels and Feldman which were similar in content to his
letters of August 30, except that this time he referred to
leasing, i.e., he indicated that he had heard of plans to
transfer licenses to new companies who would rent cabs on
a daily basis. By letters of March 19 and 21, 1975, Feldman
and Samuels responded, in substance, that they were
considering the assignment of licenses to other corpora-
tions, that the assignments would not affect the Union's
members, and that they saw no need for a meeting, but
were willing to discuss the conditions of employees in the
bargaining units. On March 26, 1975, the Union filed its
initial unfair labor practice charges in this case, alleging
that the Companies were violating their contract and the
Act by transferring portions of their business to the new
companies.
On or about March 26, 1975, the Companies received a
favorable reply from the Internal Revenue Service on their
request for a ruling. On the basis of the Companies' ex
parte submission of their plan for leasing cabs through Bell
and Comet, IRS ruled that the lessees would not be
employees for the purposes of the tax laws. On April 2,
Yellow filed an application with the Vehicle Commissioner
for permission to transfer 50 cab licenses to Bell. The
Union did not directly respond to Yellow about the matter,
other than to inquire, by letter of April 8, whether Yellow
had been soliciting drivers to become lessees for a
subsidiary or related company (Samuels answered, appar-
ently truthfully, that it had not). Instead, the Union flexed
its political muscles. At a meeting of the Chicago
Federation of Labor on May 5, Union President Clark
informed the press that the Union was opposed to leasing,
accused the Companies of engaging in union-busting
tactics by setting up Bell and Comet, and implied that the
drivers might strike. In late May, Commissioner Carter
informed Yellow that he would not approve transfer of the
licenses; and, in fact, Yellow's application has never been
acted upon. At this point Yellow and Checker considered,
and for the first time manifested consideration of, a plan
for direct leasing of cabs. The Companies, again ex parte,
requested a supplemental ruling from IRS, the proposed
plan being the same as originally submitted, except that the
Companies would lease directly instead of through corpo-
rate subsidiaries. IRS issued a favorable ruling on October
28, 1975, after direct leasing had gone into effect. By letters
of May 27, Feldman and Samuels informed Clark that
their Companies were considering leasing. They invited
discussion before their final decision, and requested a
meeting within 10 days. Samuels and Feldman further
stated that they assumed, from Clark's previous statements
to the press, that the Union was opposed to leasing under
any circumstances, and requested him to confirm, deny, or
qualify this assumption. The Union accepted the invitation
to meet, and meetings were thereafter conducted between
the parties on June 5 and 17, 1975.
Union attorney Friedman was present, participated in,
and took notes at the meetings of June 5 and 17. Friedman
testified in detail as to what was said at these meetings.
Respondents do not dispute his version of the June 5
meeting. Yellow Board Chairman Samuels, who was
present only at the June 17 meeting, testified that
Friedman's version of that meeting was correct, with three
exceptions. According to Samuels, the Companies asserted
that they wanted to lease cabs as other Chicago operators
leased cabs, but they did not say that they would use the
same form or otherwise follow the same practices as other
Chicago operations. Second, Samuels testified that compa-
ny attorney Haythorne asked whether the Union had a
proposal which they could discuss, and Friedman an-
swered: "Yes I have. Get out of the leasing business."
Third, Samuels testified that Friedman told him that he
(Friedman) was taking notes to use against Samuels. The
first item was a somewhat different version of a matter
covered in Friedman's testimony, and suggests a misunder-
standing between the parties rather than a true conflict
over what was said. The second and third items were not
mentioned in Friedman's lengthy testimony. Friedman was
meticulous and thorough in his presentation, and if he
disputed Samuels' testimony as to these items it seems
likely that he would have done so by way of rebuttal
testimony. Moreover, Samuels' testimony is consistent with
the fact that the Union never disavowed the Companies'
stated assumption that it was categorically opposed to
leasing in any form. Additionally, the Union's pattern of
conduct prior to and during the June meetings indicates
that it was resigned to the belief that negotiations would be
futile, and that its opposition to leasing would have to be
sustained in the arenas of political and legal combat. I
credit Friedman's testimony concerning the meetings, as
supplemented by the testimony of Samuels and Union
President Clark.
Both meetings were taken up in large part by the Union's
questions and the Companies' answers concerning the
leasing plans. Most of the answers were correct, although
the Companies were not entirely candid in all respects.
When Friedman asked for a copy of the form of lease
agreement, Haythorne said that it had not yet been drawn
up but it would be the same as others in use in Chicago. In
fact, although the Companies may not have reduced their
lease agreements to final form as of June 5, they had
drafted a prospective lease in 1974 (not exactly the same as
those ultimately used) and had submitted that form to IRS.
Checker President Feldman told the Union that his
Company would begin leasing with new cabs, to be divided
equally between the leased fleet and the commission fleet.
In fact, Checker reduced the number of purchases for its
commission fleet and transferred some cabs from the
commission fleet to the leased fleet. More significant,
however, are the positions which were taken by the parties
at these meetings. At the June 5 meeting, Haythorne and
1344
YELLOW CAB COMPANY
Feldman asserted that if the Companies went through with
leasing they would not recognize the Union as representa-
tive of the lessees, nor would the collective-bargaining
contract apply to the lessees. At the June 17 meeting,
Feldman stated that "we are not asking for your permis-
sion to [lease]. We are going to do it." Feldman added that
"we are only here to answer questions for your informa-
tion." Feldman and Samuels both testified that they did
not definitely decide to go into leasing until after the June
meetings. However, the position which they took at the
meetings makes clear that, although they may have wanted
to hear what the Union had to say, they had no intention of
permitting the Union to participate in that decision.
For its part, the Union was equally adamant in insisting
that any negotiations about the leasing program be
conditioned upon company recognition of the Union as the
collective-bargaining representative of the lessees. In this
regard, the following testimony by attorney Friedman
concerning the June 17 meeting is significant:
I asked at that point [after questioning Feldman
about whether there would be enough new cabs for the
commission fleet] whether the companies would negoti-
ate with DUOC, the union, regarding the terms and
conditions of their fleet of lease cab drivers, if they
actually went into leasing. Mr. Haythorne said they are
going to be independent contractors. If the drivers ask
us to recognize you, we will have that problem, and we
do not intend to recognize you now.
I said, we consider that you are violating the contract
and violating the law. I then asked, are you willing to
negotiate with DUOC regarding the terms and condi-
tions of employment of lease cab drivers of Bell and
Comet, the two new subsidiaries. Mr. Haythorne said
they will not be now and there is no point in bargaining
with you and we will not. I asked if the officers of Bell
and Comet would negotiate with us regarding the terms
and conditions of their chauffeurs, and Mr. Haythorne
said no. Mr. Haythorne said, if our answers were
changed, would you change your objections to leasing.
I said that that was a hypothetical question, that the
companies had said that they flatly were refusing to
recognize or deal with DUOC regarding their proposed
plan, that we considered that they were doing what was
illegal, that was, repudiating the contract and their duty to
bargain, that if the companies were to come to us and say,
we think leasing is something we want to do under this
contract and we want to negotiate with you about it, then
at that point we would have to go to our membership and
ask the membership whether we would be authorized to
consider that. That would come under the nature of the
amendment to the contract and we would have to go
back to the membership, I said, but you have not made
that proposal to us yet. [Emphasis supplied.]
In a similar vein, Union President Clark testified that the
Union made no proposals for leasing under the contract,
either at the June meetings or at any time thereafter,
because it already had a contract with the Company.
The Union's position at the June meetings is fatal to its
alternative theory, that the Companies refused to bargain
about leasing insofar as the leasing program constituted a
diminution of the work of the bargaining unit. If General
Counsel is correct, and the lessees are employees within the
bargaining units, then the Union was entitled to adhere to
its contractual rights, and the Companies violated the
contract and the Act by embarking upon leasing. If,
however, General Counsel is wrong, then the Union
effectively precluded negotiations about leasing by condi-
tioning such negotiations on a nonmandatory subject of
bargaining, i.e., recognition of the Union as representative
of a group of individuals who were either not employees or
who were employees outside of the bargaining unit. The
Union raised some questions about the possible impact of
the leasing program upon the commission drivers and the
commission fleet. However, the Union never requested the
Companies to bargain about any possible or asserted
removal of work from the commission fleet, beyond
declaring its opposition to leasing, nor did the Companies
manifest an unwillingness to discuss such matters as
distinct from their decision to go into leasing. If, for
example, the Union felt that the Companies were failing to
provide their commission drivers with cabs, as provided in
article III, section 3 of their contract, or were unreasonably
suspending or discharging commission drivers for low
bookings or high mileage, whether or not such actions were
influenced by the leasing program, they could have filed
appropriate grievances and pursued them to arbitration.
However, the Union did not do so. Moreover, as will be
discussed infra, such matters are beyond the scope of the
present complaint.
C. The Leasing Programs
The Companies commenced their leasing operations on
July 1, 1975. Checker commenced operating out of a
former commission garage on North Elston Street and
Yellow out of a former commission garage on South
Cicero. Beginning with about 10 cabs each, the Companies
gradually increased the size of their respective fleets. As of
February 1976, Checker had about 279 cabs assigned to its
lease garage and was utilizing the services of, or doing
business with, about 533 lessees. The comparable figures
for Yellow were about 225 cabs and about 300 lessees. As
the Companies did not seek additional cab licenses, the
sizes of the commission fleets were accordingly reduced by
transfer and obsolescence. Statistics presented in evidence
by the Companies indicated that during the last 6 months
of 1975, the previous decline in the number of full-time
commission drivers abated somewhat, but, in contrast to
prior years, the number of part-time drivers dropped
sharply. The mechanics at the lease garages are covered by
their respective union contracts. However, consistent with
their own positions, the Companies have not applied or
given effect to the chauffeurs' contracts with respect to the
lessees, and consequently, there is no checkoff of union
dues or withholding or payment by the Company for any
fringe benefits provided under the contracts. No driver has
been transferred from a commission to a lease garage, nor
is there any evidence that the Companies directly solicited
any commission driver to go into leasing. However, the
Companies have advertised in the newspapers for lease
drivers, and have contacted former drivers who voluntarily
left their employ, to ascertain their interest in leasing.
1345
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
There are three types of leases: day, night, and 24-hour.
Day leases run from 6 a.m. to 6 p.m. and night leases from
6 p.m. to 6 a.m. Yellow's rates are illustrative: $22 for day,
$15 for night, and $31 for a 24-hour lease. There is an
additional hourly charge for late returns. No charges have
been assessed based on mileage, although the lease forms
provide for such charges. After a driver has leased cabs for
4 consecutive days in a week, he may, on the 5th and
subsequent days, lease a cab at a reduced rate. A driver
may also lease a cab for 2 days at a time, or 3 days on
weekends; however, he must sign a separate lease for each
day.'2 The lessee must also post a bond ($100 to Checker
and $250 to Yellow), which is applied toward the cost of
repairing damage to the cab, up to a maximum of $250 for
each accident, if the garage manager or assistant manager
determines, in his own judgment, that the driver was at
fault. (The Companies do not carry collision insurance.
They bear the cost of all damage to commission cabs; but a
commission driver may be terminated for excessive
accident frequency.) Yellow Board Chairman Samuels
testified that the lessee may have damage repaired at an
outside garage of his own choice, but the Companies will
not pay the cost of such repair. However, former Yellow
lessee Andrew Kovacevich testified, without contradiction,
that Garage Manager Al Adler told him that he had been
instructed by the Company that lessees could not have the
cab repaired elsewhere. Adler, although still in the employ
of the Company, was not presented as a witness. I credit
Kovacevich. In any event, as the driver is required to
report all accidents to the respective Company,' 3 and the
assessments against drivers are usually well below the
prevailing costs in the repair industry, the driver has little
incentive to have the cab repaired elsewhere. In addition to
furnishing the cab and cab license, the Company furnishes
liability insurance, towing service, tires, antifreeze, oil, and
maintenance. The driver pays for the gas, which he may
purchase elsewhere (presumably at a higher cost) if he
wishes. If a cab breaks down without fault on the part of
the driver, he may receive a pro rata reimbursement of the
cost of his lease for the time which he has lost until the cab
is repaired or he is given another cab.
Every driver must sign a standard lease agreement before
taking out a cab. The Yellow and Checker lease forms are
substantially the same, except for the amounts of the
charges and deposits. The written agreement sets forth the
terms and conditions of the lease. The agreement specifi-
cally disavows any employer-employee relationship, and
provides that the lessee is not required to report his
location, furnish a trip sheet, maintain his cab in a specific
place, or account for his collections, unless required by law
12 Yellow onginally had a policy of leasing cabs at a weekly rate of S200.
but has since abandoned that practice because drivers were failing to call in
their daily mileage.
13 The lease agreement requires the dnver to report any accident to the
Company's insurer, a related entity. However, the lessees are not informed
of any telephone number to call in the event of an accident, other than those
of Yellow or Checker.
14 In view of the foregoing restrictions, I fail to see how any meaningful
analogy can be made between the Companies' leasing programs and the
operations of firms such as Hertz and Avis, which are engaged in the
business of renting autos to licensed driver members of the general public,
and which prohibit their autos from being used as taxicabs. Indeed, if I were
to accept the Companies' proposed analogy, I would be led to the ultimate
to do so. The agreement provides that the lessee is free
from the Company's direction or control, that fares are
merely suggested, and that his income is entirely his own;
again however, subject to the requirements of law and the
limitations of the lease.
Several restrictions and limitations in the lease agree-
ment warrant careful consideration. First, the Company is
not required to renew or extend the term of the lease; i.e., it
has complete and final discretion in this regard. Second,
the Company may terminate the lease and repossess the
cab for any violation of law, including illegal parking, or
any violation of the terms of the lease. Third, the lessee
must comply with, and operate the cab in accordance with,
all pertinent laws, ordinances, and governmental rules and
regulations. Fourth, the lessee must be the sole driver of the
cab. Additionally, the lessee must inspect the condition of
the cab, report accidents to the police and to the
Company's insurer, return the cab in undamaged condi-
tion, and pay all charges and fines and be liable for damage
up to $250.
The third and fourth restrictions discussed above are of
particular significance. The laws, etc., include those
promulgated by the city of Chicago and its officials,
governing the taxicab business. As previously indicated,
those laws impose upon owner and driver alike, inter alia,
an obligation to use the cab in the taxicab business to the
extent necessary to meet the public demand for service.
Therefore, it is an implicit condition of the lease that the
cab must be utilized in the taxicab business in the city of
Chicago; and consequently, I do not credit the testimony
of Feldman and Samuels that they are indifferent as to
what use the cabs are put. As to the fourth restriction, it is
of course a legal requirement that a cab may be operated
only by a licensed public chauffeur. However, Checker
lease Garage Manager James Dennis testified that his
Company, in its own economic interest, prohibits subleas-
ing even to licensed chauffeurs. Dennis pointed out that the
Company makes more money from two half-day leases
than from one 24-hour lease. Dennis testified that he will
terminate a lease for such violations. At the Yellow garage,
the Company posted a notice to the same effect, informing
its lessees that one James Hurd, licensee No. 320, had lost
his leasing privileges because he permitted his wife to drive
his cab. In sum, the Companies have utilized the terms of
the lease, in their own economic interest, to limit the
potential income of the driver by prohibiting him from
subleasing or hiring his own employee drivers, thereby
limiting him to whatever he can earn by his own labor
during the term of the lease.' 4
conclusion that the present lessees must be employees of Yellow and
Checker, because those Companies reserve more control over their lessees
than Hertz and Avis do over the persons who rent their autos. I do not view
the Administrative Law Judge's dicta in Barwood, supra, 209 NLRB at 22, as
a mandate from the Board that I undertake to make a comparison between
the operations at issue and those of some other industry or enterprise. The
issue in this case concerns the leasing operations of Yellow and Checker;
not the taxicab business in New York or St. Louis, or the auto rental or
trucking business, or public libraries or department stores. The only
meaningful analogies which can aid in deciding this case are between the
Companies' commission operations and their lease operations, or between
the facts of this case, as developed on the record, and the facts of pertinent
Board or court decisions.
1346
YELLOW CAB COMPANY
Considerable additional evidence was adduced concern-
ing whether, to what extent, and the manner in which the
Companies reserve or exercise control over the lessees. I
shall attempt to deal with this evidence, topically, seriatim:
I. Initial applications for leases, reasons for accepting or
rejecting a prospective lessee, and training of new lessees: The
Companies have avoided any necessity for training lessees
by following a policy of leasing only to experienced
cabdrivers, or to other individuals who are either knowl-
edgeable about the business or have friends or relatives
who have educated them. If an applicant appears to have
potential as a successful cabdriver, but appears to lack
necessary training or experience, the lease garage manager
will suggest that he apply to the Company for a job as a
commission driver, and return when he has sufficient
experience to become a successful lessee. The Companies
will not consider a lessee who is not a licensed public
chauffeur. Procedurally the applicant must fill out, or give
information to the manager to fill out, a short form calling
for the applicant's driver and chauffeur license numbers,
driving experience, and personal references. The lease
garage manager will interview the applicant and check out
the information in the application. If the applicant lacks
experience, the manager will question him to determine
whether he has the knowledge and ability to become a
successful cabdriver. The manager may, in his discretion,
refuse to lease to an applicant who has a record of unsafe
driving or addiction to alcohol or narcotics. If he is over 65,
the Company will have him take a physical examination.
Otherwise there are no indicated grounds for initially
refusing to lease. If accepted, the manager will ask the
lessee if he has any questions about the lease agreement,
and may call certain requirements to his attention; e.g., to
report accidents to the Company and to obey all ordinanc-
es. The lessee is then given a lessee number, he pays his
deposit and lease fee, and is assigned a cab. He is also
given a book of receipts, if requested. He may or may not
be reassigned to the same cab, just as are commission
drivers. The lessee is not given any instructions on how to
deal with the public.
2. Punctuality and regular attendance: Since the leases
commence and end at fixed times during the day, i.e., 6
a.m. or 6 p.m. and there is an hourly charge for late returns,
there is a built-in requirement of punctuality in signing in
for a lease and returning the cab. There is no requirement
of regular attendance; rather, the driver is given incentives
for such attendance. Thus, as indicated, there is a reduced
daily rate for lessees who have driven at least 4 days during
the week. Additionally, as indicated by a notice posted at
the Yellow garage, if a lessee works regularly, he may be
assured of getting his regular cab even if he reports to work
late, but if he does not work regularly, and is late, he may
not be able to get his preferred cab.
3. Maximizing earnings and minimizing costs per mile:
The lease system eliminates any need for the Companies to
concern themselves with the adequacy of the driver's
bookings, or whether the driver is earning sufficient
revenue per mile. The Companies set no requirements with
respect to these matters. The drivers' earnings are their
own.
4. Records and accountability: The lessees are required
to return their cabs with a full tank of gas and the
Company's gas attendant will read the mileage at the end
of each lease. One reason for recording mileage is the cab
maintenance schedule; additional reasons will be discussed
under the next heading. At least as of July 1976, the lessees
were not required to submit trip sheets or otherwise to
account for their time or earnings, except for the require-
ment that they report accidents.
As indicated, the Union has requested that I take judicial
notice of certain new regulations which were promulgated
by the Commissioner after the close of the hearing in this
case. Among these are a requirement that the owner keep
an accurate record of the fares collected by each driver. In
practical terms, this means that the lessee, like the
commission driver, must submit a trip sheet. I do not
attach any independent significance to these developments.
First, I am inclined to view with skepticism such posthear-
ing actions by the municipal authorities. The past history
of this case indicates that the Union has some degree of
clout at City Hall, and has not hesitated to use it. I have no
knowledge of the reasons or purpose for these new
regulations. The absence of any previous requirement by
the Companies that the lessees submit trip sheets, and the
evidence which indicates that the Companies have no
motivation for such a requirement, suggest that the new
regulations were not promulgated in furtherance of the
interests of the Companies vis-a-vis their lessees. Therefore,
the new regulations may simply be lumped into the general
question of whether, by its intensive regulations governing
the work of Chicago cabdrivers, the city has per se imposed
an employer-employee relationship. This question will be
discussed in the concluding findings of this Decision.
5. Limitations on earnings: As indicated, one such
restriction is the requirement that only the lessee may
operate the cab. However, Yellow lessee Mike Olsen and
former lessee Andrew Kovacevich testified, without contra-
diction, that lease Garage Manager John Gallagher told
them that the lessees were not permitted to exceed 250
miles per day, and that anybody who did would be
discharged and not given another lease. Gallagher did not
give any reason for this requirement. Olsen testified that
Gallagher told him that he was doing too many miles.
Olsen further testified that when he pointed out to
Gallagher that the lease provided that he was to be free
from the Company's control, Gallagher responded by
pointing out that the Company was not obligated to renew
or extend the lease. According to Olsen, this requirement
limited his earnings because, in the past, he had driven as
much as 500 miles in one day. Gallagher was not presented
as a witness. There is no evidence that any driver has been
suspended, or that the Company has refused to renew or
extend a lease because of excess mileage. However, Yellow
Board Chairman Samuels testified that he instructed his
garage manager to talk to lessees who exceeded more than
250 miles in one day, because such high mileage indicated
either that the lessee was not driving at a safe speed or that
someone else was operating the cab. Additionally, Samuels
pointed out that it was uneconomical for the Company to
have so much mileage placed on its cabs, because its
insurance costs (and of course its maintenance costs) are
1347
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
based on mileage. Samuels testified that 250 miles is more
than double the amount placed on a cab by an average
driver in one day. This testimony confirms what I have
already found; i.e., that Samuels knew that the vehicles had
to be used as taxicabs. Of course, if cost were the only
factor, the Companies could simply have imposed an
excess mileage charge.
I credit the testimony of the lessees concerning the
statements by Gallagher. However, I credit Samuels'
explanation for the mileage limitation, and I do not credit
the testimony or implication that the mileage ceiling
limited the potential earnings of the drivers. As indicated,
testimony of witnesses for both sides establishes that the
Companies expect their commission drivers to earn about
45 cents per mile and at least $50 per shift. The figures
indicate that a driver who attained these goals would put
on about 111 miles; and thereby tend to corroborate
Samuels' assessment of average mileage. Moreover, the
normal working day of a cabdriver is 9 hours. If a driver
operated an automobile on an interstate highway at the
legal limit of 55 miles per hour, constantly and without
letup, he would need more than 9 hours to travel 500 miles.
In light of these figures, I find it inconceivable that a
cabdriver in the city of Chicago could come anywhere near
putting on 500 miles in one day. I further find that the
Companies could fairly infer that a lessee who exceeded
250 miles in one day was either operating the cab in an
unsafe manner or permitting someone else to drive the cab,
and that in imposing a 250-mile limit, Gallagher was
attempting to effectuate the lease requirements that the
lessee obey traffic laws and that he be the only operator of
the cab.
6. Liability insurance and workmen's compensation cover-
age: The Companies each maintain liability insurance on
their cabs. I find nothing surprising in the fact that the
owner of a vehicle carries liability insurance on that
vehicle, and I attach no greater significance to this fact
than to the fact of ownership. General Counsel also
introduced into evidence workmen's compensation policies
which on their face purport to cover all garages of the
respective Companies, including the lease garages. General
Counsel contends that these policies demonstrate, either by
fact, or admission by the Companies, that the lessees are
employees. I do not agree. First, the Checker policy covers
three categories of employees (drivers, garage, and clerical)
and the Yellow policy in question covers driver, clerical,
and office employees. As Yellow and Checker have garage
and clerical employees at their lease garages, it cannot be
assumed, absent extrinsic evidence, that the policies were
intended to cover the lessees. Second, there is no evidence
that the policies have been applied to any lessee, although
presumably at least one lessee must have been injured
while at work during the time that leasing has been in
effect. Third, and most important, the Supreme Court of
Illinois has held with respect to the operations of other
Chicago cab companies, that lessees are employees for
purposes of workmen's compensation coverage. Penny Cab
Co., supra; Morgan Cab Co. v. Industrial Commission, 60 I11.
2nd 92, 324 NE 2d 425 (1975). The facts in Penny are not
distinguishable in any crucial respect from those in the
present case. As indicated, the court in Penny held that the
city requirement for workmen's compensation coverage in
effect classified the drivers as employees of the cab owners.
Of course, the decision of the highest court of a State
constitutes a definitive interpretation of the laws of that
State and its subdivisions. However, I am called upon to
interpret and apply Federal, not state, law, and for that
purpose, Penny and Morgan, like other state court decisions
cited in those opinions, are persuasive rather than binding
authority. I am also inclined to question the rationale of
Penny, because the Municipal Code requires the cabman to
provide workmen's compensation insurance for his "em-
ployees" and not for "chauffeurs." I am further inclined to
believe that the Board would accord greater persuasive
weight to the views of a Federal court of appeals,
interpreting and applying Federal law, particularly one
having venue where the case in question arose, viz, Party
Cab Co., supra, than to the decisions of a state court.
7. Fringe benefits: The lessees do not receive the fringe
benefits which are provided to qualified full-time drivers
under the union contract, i.e., pension fund, life and health
insurance, medical diagnostic clinic, and vacation, robbery,
waiting and breakdown pay, although as indicated, an
allowance may be made for breakdowns. Feldman and
Samuels testified that the Companies were considering the
purchase of group hospitalization and IRA retirement
plans for the lessees. The Union has requested me to take
judicial notice of the fact that after the close of the hearing,
Checker inaugurated a plan providing for free hospitaliza-
tion insurance to drivers who lease for a minimum of 22
shifts per month. The principal significance of the plan is
that like the reduced daily leasing charge, it is an incentive
for the driver to voluntarily work regularly.15
8. Cabstands and O'Hare Airport: The use of cabstands
is governed by municipal regulations, but the stands are
unattended. The operation of cabs at O'Hare Airport is
governed by detailed regulations promulgated by the
Commissioner and the City Department of Aviation. The
regulations cover virtually every aspect of the cab's
operation, including rates to suburban destinations. The
extent and at least one purpose of these regulations is
indicated by a statement in the regulations that "passen-
gers have a right to expect professional service and
anything [less] is a reflection on our city and its facilities."
The regulations are administered at O'Hare by "starters,"
i.e., employees of Chicago cab companies, including
Checker and Yellow, who are furnished to the city. The
starters work under the direction of an official of the
Commissioner's office. Each wears the distinctive badge of
his company, and is responsible for directing the cabs of his
company, whether leased or commission. The regulations
govern the relations between the starter and the driver at
the airport. Although the starters are paid by their
companies and are potentially subject to their discipline
and control, the foregoing facts indicate that at O'Hare, the
starters act on behalf of and are the agents of the city.
Therefore, their activities are not independent evidence of
employee status of the lessees, unless, again, the entire
la This analysis constitutes my disposition of the Union's request.
1348
YELLOW CAB COMPANY
pattern of municipal regulations, per se, imposes that
status.
9. Radio and dispatch calls: Yellow lessees Olsen and
Kovacevich testified without contradiction that Garage
Manager Adler told them that Yellow would be putting
radios in the leased fleet. Former Checker lessee Cornelius
Jones testified that Garage Manager Dennis told him that
Checker would be putting in radios. Checker President
Feldman testified that he had no plans to put in radios, and
Dennis testified that he had never been informed of such
plans. Kovacevich testified that at the beginning of their
shifts, Gallagher has offered lessees, including himself,
orders which were received through Yellow's central
dispatch service, but that no one was required to take such
calls. On occasion, Yellow has issued calls over its radio
service, informing drivers to notify a lessee (identified by
cab number) to call his office. However, there is no
evidence as to what these calls were about. These facts
corroborate what is already evident; namely, the integrated
nature of the Companies' operations. However, as the lease
agreements do not require lessees to take radio or dispatch
orders, and there is no evidence that the Companies impose
or intend to impose such requirements, the facts do not
demonstrate reserved or actual control over the work of the
lessees.
10. Charge tickets and customer coupons: The Compa-
nies have charge account customers, e.g., airlines and the
Board of Education, who issue charge tickets which are
filled out by the passenger and may be used in lieu of cash.
The Companies also issue coupons which may be used in
lieu of cash. A tip may be indicated on the charge ticket.
Lessees may, and will, accept these charges, turn them in to
the Company, and receive credit on their lease fees or
payment for gas. The Companies do not require their
lessees to accept these charges. The drivers normally have
no reason to reject them, and rejection of a valid coupon or
charge ticket might result in difficulties with the Commis-
sioner. However, Yellow has posted notices at its lease
garage informing the lessees not to accept charges or
coupons from certain firms, or to permit tipping on certain
charge accounts, or to accept vouchers issued by other cab
companies. In light of the financial arrangements between
the Companies and their lessees, and the testimony of
lessee Olsen concerning the application of these "rules," I
do not interpret them as literally prohibiting the drivers
from accepting such charges. The drivers are free to collect
reimbursement directly from the charge customers, and in
fact, Olsen did so. Rather, the Companies have simply
informed the lessees, for reasons of their own, e.g.,
uncollectibility, that they will not accept such charges in
lieu of cash.
II11. Surveillance by roadmen: Checker President Feld-
man testified that his roadmen have been instructed to
disregard lessees' cabs. The lessees' cabs are numbered in
series, and thereby are identifiable by the roadmen. In fact,
the evidence indicated that except for investigating acci-
dents, the roadmen have generally disregarded leased cabs.
The principal reason for surveillance from the Companies'
standpoint, i.e., cheating the Companies of revenue, has
been obviated. Garage Manager Dennis testified that he
receives on the average about one call per week from
Checker General Manager Matthews concerning a leased
cab, and that these usually concern either a bad order cab,
e.g., missing hubcap or top light out, or a call from the
Commissioner's office. In the latter case, Dennis will give
Matthews the name of the lessee, and the lessee will be
informed if he has been required to report to the
Commissioner's office.
12. The Companies' asserted grounds for terminating or
refiusing to renew or extend leases, and the handling of such
matters: The lease garage managers have discretion to
refuse to continue leasing to a driver. The assistant garage
managers and cashiers also have on-the-spot discretion to
refuse a lease in accordance with the Company's or the
manager's policy, e.g., nonpayment of fees or visible
intoxication. Checker Manager Dennis testified that in a
total of about 20 cases he has refused to renew a lease,
either for a bad at-fault accident, subleasing to a person
without a chauffeur's license, or drinking. In the first event,
Dennis will consider the lease as having expired when the
accident occurred, and will refuse to give the lessee another
cab. In determining fault, either for purposes of assessing
liability or deciding whether to continue a leasing relation-
ship, the garage manager exercises independent judgment,
and may set his own policy, e.g., when a cab strikes the rear
of another vehicle, the cabdriver is deemed at fault.
Feldman and Dennis also testified that Dennis may refuse
to lease to a driver who is destructive, abusive to company
personnel, or difficult to keep around, e.g., a person who
complains too much. These somewhat amorphous grounds
indicate that, in fact, the garage manager has been given
wide latitude in deciding whether or not to lease to a
particular individual. The lease itself places no limit on the
Companies' discretion. Yellow Board Chairman Samuels
testified that Yellow will refuse to lease to a known unsafe
driver or one who owes money to the Company, the former
being the most common reason. As will be discussed in
part, more fully in connection with the Jacobe matter, I
find that General Counsel has failed to show that either
Company has ever refused to lease a cab for any reason
other than those described by the Companies' witnesses.
13. Dress, behavior toward the public, and Commissioner
or passenger complaints: General Counsel contends that
Yellow instituted a dress code for its lessees, and in support
of that contention presented testimony by lessees Olsen
and Kovacevich. According to the lessees, former Garage
Manager Adler told them that the lessees would be getting
distinctive caps and shirts, and that they could not wear
cutoffs, sandals, or tank tops, although according to Olsen
most of the drivers were, at the time, dressed that way. The
shirts were never furnished. The caps were furnished about
July 22, 1975. Olsen testified that he wore his cap as a joke,
and that eventually most of the drivers stopped wearing
them. In fact, the matter of dress is governed by municipal
regulation, and the evidence, including the testimony of
Olsen and Kovacevich, indicates that except for the
wearing of sandals, which might interfere with safe driving,
the Company's interest in lessee attire has substantially
been limited to calling the lessees' attention to the
municipal regulations.
Checker Manager Dennis testified that he will not deny a
lease because of passenger complaints relating to a driver's
1349
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
behavior. Rather, Dennis asserted that he would leave such
matters up to the Commissioner's office, because they do a
good job. As an example, Dennis testified that if a
customer complained to the Company about an over-
charge, and the complaint was referred to him, he would
tell the driver that he could give him (Dennis) a refund to
pass on to the customer, or he (Dennis) would back the
passenger when the passenger complained to the Commis-
sioner. Dennis testified that in the latter event, he would
tell the customer to call the Commissioner, but that
normally the driver will pay because he knows that
otherwise he will face suspension of his license. If the
complaint involved a lesser matter, such as an uncomfort-
able ride, Dennis will tell the passenger that he will take
care of the matter, but will do nothing, on the assumption
that if the passenger is sufficiently concerned, he will call
the Commissioner; or Dennis may advise the passenger to
call the Commissioner. However, if the complaint relates to
matters which indicate unsafe driving, e.g., drinking,
Dennis may refuse to lease. I find no basis for disbelieving
Dennis concerning the procedure which he follows in these
matters. Rather, as indicated by the testimony of several
witnesses, the manner in which the city of Chicago
regulates the taxicab business has substantially made it
unnecessary for the Companies to discipline drivers,
whether commission or lease, concerning customer com-
plaints about driver behavior. I do not credit the testimony
of Checker President Feldman that he told Dennis to tell
customer complainants that the Company was not respon-
sible for the drivers in his garage because they were lessees.
That testimony was not corroborated by Dennis, and is
inconsistent with Dennis' own description of his proce-
dures. Rather, Dennis, and presumably his counterpart at
Yellow, will avoid taking any adverse action by referring
unresolved complaints to the Commissioner, unless action
is deemed necessary to protect the Companies' property or
to protect them from liability at law.
14. Union or concerted activities: General Counsel
contends that Yellow refused to lease to one Robert Jacobe
because of his union or concerted activities. I fail to see
how this allegation, standing alone, even if true, would
demonstrate employee status. However, General Counsel
contends that the Jacobe matter is significant because it
allegedly shows (1) that the company officials testified
falsely concerning the grounds for refusing a lease, (2) that
the Companies maintain close surveillance over the
activities of their lessees, and (3) Yellow used the Jacobe
termination as a means of exercising control over its
lessees. Upon consideration of the evidence, I find that
General Counsel has failed to sustain his position in this
matter.
Initially, it should be noted that although Yellow
terminated Jacobe's leasing privileges on October 15, 1975,
well within the 10(b) period even as of the close of this
hearing, no unfair labor practice charge was filed by him or
on his behalf, notwithstanding the Union's position that he
enjoyed the status of an employee. This fact alone casts
doubt on the merits of his case. However, there are more
substantial reasons for doubt. Jacobe gave three different
versions of his saga: one on direct, another on cross, and a
third on redirect examination. His testimony was replete
with contradictions and obvious falsehoods. In fact, Yellow
terminated Jacobe's leasing privileges on October 15, 1975,
because his driver's license had been suspended, and
Yellow therefore had no alternative. In the spring of 1975,
Jacobe was ticketed for an illegal U-turn. After he failed to
show up for a hearing, his driver's license was suspended.
Nevertheless, Jacobe continued to drive a cab until
October 14, when he was ticketed and arrested for going
through a red light and driving without a license.
There was also evidence that during the summer of 1975,
Assistant Garage Manager Larry Durnil, who is in charge
of the lease garage at night, refused or delayed permitting
Jacobe to take out a cab on various dates. Jacobe testified
that according to statements made by Durnil, these actions
related to Jacobe's activities in forming a "social club" of
lessees, which Durnil considered to be a union. Durnil
testified that his actions had nothing to do with the social
club, but related to the fact that Jacobe was sometimes
short of money for a lease. I have no reason to question
Durnil's credibility, whereas I have ample reason to
question that of Jacobe. Moreover, Durnil's actions are
more consistent with his version than that of Jacobe. If
Durnil were concerned about Jacobe's ostensible union
activity, it is more likely that he would have gotten rid of
him once and for all, rather than occasionally refuse or
delay leasing. Additionally, Jacobe by his own admission
was somewhat less than financially responsible. After his
arrest, Jacobe called the garage, not to inform Durnil of the
facts, but to ask him for money. On one occasion in
August, when Jacobe's cab was damaged, Jacobe falsely
stated that the cab was parked at the time, but subsequent-
ly admitted to the Company that the damage occurred in
circumstances which indicated that he was at fault. In view
of Yellow's long tolerance of Jacobe, I find it highly
unlikely that its actions were motivated by any animus
toward him or his "social club" activities.
General Counsel further contends that Yellow engaged
in surveillance of the lessees' activities with respect to the
club. As to this allegation, Durnil testified that he received
complaints from persons living in the vicinity of the hall
where the club met, that Yellow cabs were blocking their
parking spaces and driveways, and that he talked to Jacobe
about the matter. If, in the process, Durnil learned about
the club or its activities, his action could hardly be
classified as surveillance or interrogation concerning union
activities. Rather, Durnil had a legitimate concern, for
under Illinois law, the owner of a motor vehicle may be
liable for parking tickets, whether or not the driver is its
agent. City of Chicago v. Hertz, No. 57891, Ill. App. (1976).
In sum, I find that General Counsel has failed to sustain his
position in the Jacobe matter, that the Company's dealings
with Jacobe demonstrate an absence of animus with
respect to him or his putative union activities, and that the
evidence concerning the entire matter casts doubt on the
veracity of testimony by Jacobe and other General Counsel
witnesses, whether or not expressly denied, suggesting that
Jacobe was terminated for reasons which, if he were an
employee, would be violative of the Act.
1350
YELLOW CAB COMPANY
D. Concluding Findings with Respect to the Status
of the Lessees
If the Board's reported Decisions ended at volume 207, 1
would have little alternative but to find that the lessees are
employees. In a line of decisions prior to that point, the
Board found lessees of taxicabs to be employees within the
meaning of the Act. 16 In Association of Independent Taxicab
Operators and Checker Cab Association, the Board found
the lessees to be employees on facts which were substantial-
ly or materially indistinguishable from those of the present
case. In Miami Beach Yellow Cab Co. and Buffalo Cab Co.,
the Board based its decisions on facts which evidenced less
control over the drivers than exists in the present case.
Thus, in Miami Beach, the drivers were free to work their
own hours and to hire other persons to drive the cab. In
Blue Cab Co., the Board attached significance to the short
(24-hour) duration of the lease (156 NLRB at 498); and in
Buffalo, to the scheme of municipal regulation. In Checker
Cab Association, the Board declined to attach controlling
significance to the fact that the cab's owner did not
withhold income taxes for the lessees.
However, in Greater Houston Transportation Company
d/b/a Yellow Cab Company, 208 NLRB 1020, as was
pointed out by the dissenting Members, the Board struck
out in a new direction in this area. The Board majority,
over the dissent which relied on the authority of Checker
Cab Association (which in turn cited Miami Beach and
Central Taxi Service as authority), found lessees to be
independent contractors. The majority declined to attach
significance to the fact that the cabs appeared in all
outward respects to be those of the owners and were so
represented to the public. Thereafter, in BarwooC4 Inc., 209
NLRB 19, and Columbus Green Cabs, 214 NLRB 751, the
Board majority found lessees of cabs to be nonemployees.
In Barwood, the Board based its decision on a record which
was not fully developed. But the same cannot be said for
Columbus. I have carefully reviewed the facts of Columbus
as set forth in the majority and dissenting opinions, and
find that Columbus is substantially and materially on all
fours with the present case. Indeed, General Counsel
virtually concedes as much, and the Union is hard put to
contend otherwise. General Counsel suggests that "there
appears to be an ebb and flow" in the Board's decisions in
this area. The Union concedes, with some measure of
understatement, that some factors in Columbus are similar
to those in the present case, but asserts that Columbus is an
"aberration." The Union suggests certain factual differenc-
es between Columbus and the present case. However, these
asserted differences are either based on a misinterpretation
of the facts of this case, or upon matters which are of minor
significance, inconclusive, or peripheral to the owner-lessee
relationship. In some respects, the facts in Columbus
evidenced more reserved control than exists in the present
case. The drivers were required to attend training sessions,
they depended on the lessors' dispatch service for most of
their business, they were issued a manual which informed
16 See Checker Cab Comrpany and its Members, 141 NLRB 583, 587-588
(1963). 153 NLRB 651 (1965), affd. 367 F.2d 692 (C.A. 6, 1966); Blue Cab
Company and Village Cab Company, 156 NLRB 489 (1965); Association of
Independent Taxicab Operators, Inc., T/A Diamond Cab, 164 NLRB 859
(1967); Central Ta.ri Senrice, et al., 173 NLRB 826 (1968): Transportation
them that their actions spoke for the lessor, and the lease
could be rescinded by either party for any reason. General
Counsel and the Union place their principal reliance on
John Himmer Transfer, Inc., 221 NLRB 284 (1975), in
which a majority consisting of Board Members Fanning
and Jenkins, with Member Penello dissenting, found
lessee-operator steel haulers to be employees. The majority
placed significance on the facts that the lessor exercised
extensive control pursuant to government regulations, and
paid workmen's compensation for the drivers, that either
party could terminate the lease on 30 days' notice, and that
the trucks were required to display the lessor's insignia.
I find that Columbus, rather than Himrner, is controlling
authority with respect to the present case. First, notwith-
standing the Companies' urging that I seek my guiding star
in some other industry, I am inclined to attach greater
significance to those cases which involve lessees of
taxicabs. The decisions in Himmer, Penn Versatile Van
Division of Penn Truck Painting and Lettering Corp., 215
NLRB 843 (1974), and Dixie Transport Company, 218
NLRB 1243 (1975), when compared with Greater Houston,
Barwood, and Columbus, pose seemingly irreconcilable
differences which would suggest that there is one line of
authority for trucks and another for taxis. Where, as here,
there are two apparently conflicting lines of authority,
issued approximately contemporaneously, and one neither
distinguishes nor disapproves of the other, it is appropriate
to apply the cases which arose in a context similar to that
in the case at bar. Moreover, it is probable that the Board
would exercise considerable restraint before informing a
respondent that he was wrong in acting in reliance on a
recent line of Board cases, and thereby incurred a heavy
liability. It is important to be right, but predictability and
stability in the law are also desirable. Second, the majority
in Himmer consisted of Members Fanning and Jenkins,
who dissented in Greater Houston, Barwood, and/or
Columbus. However, in Local 814, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America (Santini Brothers, Inc.), 223 NLRB 752 (1976),
on remand from a court of appeals, the present full Board,
with Members Fanning and Jenkins dissenting, issued a
decision which, sub silencio, backs away from the rationale
of Himmer. The majority reaffirmed the Board's prior
determination that certain contracting operators of moving
vans were independent contractors. The majority held that
although the drivers were subject to ICC and DOT
regulations which required Santini, the putative employer,
to exercise control as to safety checks and health and
qualifications of the drivers, nevertheless, discounting
those factors, the operators were sufficiently free from
direction and supervision of performance to warrant a
finding that they were independent contractors. Addition-
ally, the dissent relied on various factors which present
similarities to the present case. The operations were an
integral part of Santini's business; the trucks bore Santini's
name and colors, could travel only under its bills of lading
and carry only its loads; the drivers followed a detailed
Promotions, Inc., et al., 173 NLRB 828 (1968); Miami Beach Yellow Cab, et
al., 173 NLRB 831 (1968); Checker Cab Association, Inc., 185 NLRB 182
(1970); and Buffalo Cab Co., Inc., 189 NLRB 410 (1971). In Checker Cab
Co., the court of appeals did not discuss the status of the lessees: rather, the
appeal was litigated on other issues.
1351
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
procedure which was directed by Santini; the drivers had
no property interest in the business other than ownership
of the tractor; their earnings depended on Santini's
business; there was an absence of training only because
Santini used experienced drivers; and Santini had authori-
ty to terminate the drivers on short notice and would
certainly exercise that authority in the face of preventable
accidents, misconduct, or dishonesty. Santini indicates that
there has been more ebb than flow in the recent decisions,
and that Himmer rather than Columbus Green represents a
detour from recent trends.
With respect to the present case, the short duration of the
lease is a potentially powerful factor for exercising control
over the work of the lessees. But the same factor was also
present in Columbus, and the Board declined to give it
controlling weight. I do not know that the Board would go
so far as did the Seventh Circuit in Party Cab Co. v. United
States, 172 F.2d 87,17 nevertheless the Board declined to
attach significance to this factor. A second factor is that the
lease requires the drivers to obey municipal ordinances and
regulations which in themselves constitute a detailed
scheme of control over the driver's operations. The Union
suggests that this scheme is unique to the city of Chicago.
In fact, the Board decisions make clear that such intensive
regulation is a fact of life in many if not most large
metropolitan areas. The lessees in Columbus were also
required to adhere to such detailed regulations; indeed, the
city of Columbus required that cab owners in turn require
the drivers of their cabs to maintain and turn in trip sheets
similar to those maintained by the Companies' commission
drivers. The manner in which the Chicago regulations are
enforced tends to mitigate the significance of this factor.
Thus, in Buffalo Cab Co., supra, the Board held that the city
ordinances of Atlanta reflected an intention to provide for
protection of the public through the requirement of
centralized supervision and control in the operating
company. In the present case, Yellow and Checker have
largely yielded or abdicated such control in favor of the
municipal authorities. See also Sida of Hawaii, Inc. v.
N.LR.B., 512 F.2d 354 (C.A. 9, 1975), in which the court
observed that under Board decisions, the fact that the
putative employer incorporates into its regulations control
required by a governmental agency does not establish an
employer-employee relationship. A third factor of control
in the present case is the restriction against permitting
anyone other than the lessee to operate the cab. However,
that factor was also present in Columbus. What remains, in
substance, is that Yellow and Checker have reserved the
right to exercise certain controls which they deem neces-
sary to protect their vehicles and other property and to
protect themselves from civil or criminal liability resulting
from the operation of the cabs. These controls are
insufficient to establish an employment relationship.
Therefore, on the authority of Columbus Green Cabs, I find
that the lessees of Yellow and Checker are not employees
17 In Party Cab, the court held that the matter of control which is
material is that which the lessor exercises during the period that the drivers
are in possession of their cabs, and not what the lessor might do either prior
or subsequent to such period.
"s In view of these findings, it is unnecessary for me to pass on the
Companies' alternative contention that even if the lessees are found to be
within the meaning of the Act. Consequently, General
Counsel's case must fail.18
E. Concluding Findings Concerning the Union's
Alternative Theory, and Alleged Refusals To Furnish
Information
I have found that the Companies did not refuse to
bargain about their decision to go into leasing, insofar as
that decision might affect the drivers in the commission
fleet; nor did they refuse to bargain about the possible
effect of leasing on the working conditions of the
commission drivers. Rather, at the June 17 meeting, the
Union precluded bargaining along these lines by adamant-
ly insisting that it could not consider any alternative to the
Companies' plan unless they recognized the Union as the
bargaining representative of the lessees under the existing
collective-bargaining contract. As the lessees were nonem-
ployees, the Union's demand was a nonmandatory subject
of bargaining, if not improper, and the Companies were
warranted in breaking off their discussions at this point.
Therefore, it cannot be found that the Companies acted
unlawfully by unilaterally instituting leasing. The Union
was given notice of the Companies' intention to go into
leasing, and an opportunity to discuss the matter and
bargain about its impact on the commission drivers, but
the Union rejected the opportunity for such bargaining.
At the hearing, I permitted the Union to introduce
evidence which might show that the decision to go into
leasing was a mandatory subject of bargaining because it
affected the working conditions of the commission drivers.
However, the position which the Union took at the June 17
meeting undercut the basis for that rationale. If leasing has
spawned consequences which affect or might affect the
working conditions of the commission drivers, e.g., that the
Companies have taken work from those drivers, such
consequences might be the subject of a grievance or of a
specific allegation in another unfair labor practice com-
plaint. However, the present complaint, except for alleged
refusals to furnish information, is confined to the Compa-
nies' decision to go into leasing and their inauguration and
maintenance of that program. The Companies are not
required to meet allegations which cover a multitude of
possible consequences, but which are not specifically
pleaded in the complaint. In fact, the Union failed to prove
that leasing has had any adverse impact on the commission
drivers, unless the transfer of cabs to the lease garages can
be deemed, per se, to have such effect. The Union failed to
prove that as a result of leasing, commission drivers have
suffered diminution of income, assignment to inferior cabs,
inability to obtain safe and operable cabs, or terminations
or discharges for low bookings and high mileage, or that
applicants for commission driving have been turned down
for lack of a cab. Vague and generalized testimony along
some of these lines (in some respects admittedly false) was
employees they should not be considered accretions to the recognized
bargaining units. It is also unnecessary for me to determine whether the
lessees are bailees, independent contractors, or joint venturers. See Parry
Cab Co., supra; Martin v. Wichita Cab Co., 161 Kan. 510, 170 P.2d 147, 152
(1946).
1352
YELLOW CAB COMPANY
substantially and effectively refuted by specific evidence,
including statistics, presented by the Companies.
The complaint alleges that since on or about July 1, 1975,
the Companies have refused to supply requested informa-
tion necessary to the administration of the collective-
bargaining contract. General Counsel's sole assertion in
support of this count concerns letters which were sent by
Union President Clark to each of the Companies on June
30, 1975. Clark requested each of them to furnish
information as to the number of new cabs purchased in
1972, 1973, 1974, and 1975, whether the cabs were assigned
to employees under the contract, and if not, to give details.
Clark further requested them to indicate how many cabs
were not so assigned, and why, and whether the Companies
had ordered any cabs for operation outside of the contract.
Feldman and Samuels each responded that it was their
view that they were not required to furnish such informa-
tion because it involved matters of managerial discretion.
However, each informed Clark of the number of cabs
purchased in 1972, 1973, and 1974, the number of cabs
purchased for the commission fleets during the first 6
months of 1976, and the projected number of future
purchases for the commission fleets. As the remaining
requests deal with matters outside the bargaining unit, i.e.,
with the leased fleets, the allegation that the Companies
violated Section 8(a)(5) by failing or refusing to furnish the
requested information is without merit.
The Union presented in evidence two additional requests
for information. The Companies have regularly furnished
the Union with the names of employees who have been
terminated, as required by article IV, section 7 and article
VI, section 4 of their contract. However, by letter of June
30, 1975, Clark requested that Samuels furnish the reasons
for each termination in 1973, 1974, and 1975. The record is
not clear as to whether Clark made a similar request to
Feldman. The Union contends that the Companies' failure
or refusal to furnish such information was violative of
Section 8(aX5). The Union never informed either Company
that it considered the information to be related to leasing,
and the Companies had no reason to believe that the
requests were predicated on such considerations. The
Union attempted, but admittedly failed, to prove that the
number of discharges for low bookings or high mileage
increased after the advent of leasing. Therefore, this
allegation, whether or not true, is beyond the scope of the
complaint. The second request was contained in letters
from Clark to Yellow and Checker dated July 17, 1975.
Clark requested that the Companies furnish copies of their
operating statements from 1973 to date, tax returns from
1973 to date, and balance sheets if a consolidated return
was filed. The stated predicate for this request was that in
the June 5 and 17 meetings, and publicly, the Companies
had stated that their decision to go into leasing was based
on economic necessity. Clark asserted that therefore the
Union needed the data in order to better understand and
evaluate the Companies' position and in order to assist the
Union in enforcing its contract. Feldman and Samuels
responded that they did not say that the decision was based
on economic necessity; rather, it was based on "financial
trends" including the declining number of shifts driven.
They asserted that therefore they had no obligation to
furnish the requested data, and, in any event, that the
request did not involve matters affecting the bargaining
units. The Companies' operating statements are on file with
the Commissioner; however, Clark never attempted to see
those records. The difficulty with the Union's position is
that its request came too late. The Union passed up an
opportunity to negotiate concerning leasing, and therefore,
the matter was closed. Any other purpose for the request
would be beyond the scope of the complaint.
v. THE ALLEGED UNFAIR LABOR PRACTICES: THE
CHECKER TAKE-HOME CASE
A. The Facts
The collective-bargaining contract between Checker and
the Union does not contain any provision which expressly
prohibits or provides for a practice whereby Checker or its
garage managers might permit drivers to take cabs home
with them. The contract contains an implied recognition
that drivers will normally return their cabs to their garage
at the end of their shift. Specifically, article III, section 10
provides in the context of provisions relating to mainte-
nance and servicing of cabs, that "[t]he chauffeurs shall
drive their cabs to the gas pumps and remain with their
cabs until they are properly gassed and oiled, and shall spot
their cabs at designated locations in the garage." However,
Checker's rule book expressly provides "[w]hen you have
completed your day's work, check cab in at your garage"
and that "all night drivers must check in by 6:00 a.m."
In fact, all parties agree that prior to February 1975,
some practice existed whereby individual drivers were
permitted to take their cabs home with them. However,
there is conflicting evidence as to the extent and nature of
this practice. Checker President Feldman testified that he
had uniformly demanded adherence to the rule which
required drivers to check in their cabs at the end of each
shift. He testified that the reasons for this rule were to
enable the Company to account for its vehicles, check for
damage, check if the cabs were properly gassed and oiled,
and ensure that its drivers got enough rest. According to
Feldman, he determined, as a result of an investigation
which was conducted by Checker Vice President Collins in
December 1974, that the garage managers at Units 4 and 8
had been permitting drivers to take their cabs home with
them, in violation of company policy, and that this practice
had been going on for a "couple of years." However, driver
Samuel Davis testified that at Unit I he had been
permitted, without charge, to take his cab home with him
at night, and that he had been doing this for about 19-1/2
years. Davis testified, in sum, that this arrangement was
lucrative for both himself and the Company. According to
Davis, this arrangement enabled him to begin working
directly from his home and to supplement his earnings by
about $46 per day, by transporting a regular group of
passengers from the area of his home to Unit 1, and back at
the end of the day, a distance of 10 or 11 miles each way.
Davis was the only witness presented at the hearing whose
testimony indicated that he had any firsthand knowledge
of the practices at any Checker garage. Checker did not
present the testimony of any of its garage managers or
other garage supervisory personnel, and although Collins
1353
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was presented as a company witness, he did not testify
concerning the investigation which he allegedly conducted
for Feldman. I have no reason to disbelieve the testimony
of Davis. However, when viewed in the context of other
evidence, including the testimony of Feldman and of
Union Vice President Polk, the evidence falls short of
establishing that Davis' personal experience reflected
anything like a uniform practice throughout the Checker
operation, or even at any one garage. According to Polk,
the Union was aware that a practice existed whereby
dispatchers permitted drivers whose bookings were above
average (described by Polk as "privileged characters") to
take their cabs home with them. Polk testified that no
grievances were ever filed over this practice, and the Union
never complained or otherwise brought it to Checker's
attention, because "we would just be cutting our own
throat." However, Polk admitted that the Union was also
aware that the "privileged characters" had been paying for
this privilege; and indeed, in a letter to Feldman, which
will be discussed further, he asserted that garage managers
had been charging as much as $20 per week for such
privileges.
Feldman testified that he concluded that it would be too
difficult to enforce the Company's rule, that the drivers
wanted take-home privileges, and that, consequently, he
decided to initiate a policy whereby full-time drivers who
had demonstrated their earning ability would be allowed
take-home privileges for a set fee. Feldman and his staff
concluded that a fee of $10 per week would adequately
compensate the Company for the additional mileage
placed on its vehicles. According to Feldman, the new
policy was first tried out in January 1975, at Unit 8, where
about 15 to 20 drivers opted for the take-home privilege,
and there were no complaints. No notice was given to the
Union. Those drivers who were qualified and who desired
take-home privileges were required to sign a one-page
document, self-described as a "contract," whereby for the
set fee, the driver was permitted to keep a cab at a place
other than his assigned garage, subject to certain condi-
tions. The "contract" provided that the cab could be used
only for cab business and as transportation between the
driver's home and garage, and that only full-time drivers
who lived within 5 miles of their assigned garage, and who
earned weekly bookings of at least 25 percent over their
garage average if on a single shift, or not more than 10
percent below their average if on a double shift, were
eligible for the program. The contract also contained
provisions governing the time and manner of checking in
the cab and the driver's responsibility for its care while
based away from the garage. On February 2, 1975, the
program was extended to Unit 1, where, according to Polk,
a commotion ensued among the drivers. Polk testified that
he was summoned to Unit I by the Union's shop steward,
that about 13 or 14 drivers had complained about paying
for take-home privileges, and that another steward ob-
tained some of their signatures on a written complaint.
Samuel Davis, whose name appears on the complaint,
opted for and was given take-home privileges under the
new program, although he lived more than 5 miles from
19 Polk and Union President Clark both testified that Clark also sent a
letter to Feldman, however the Union subsequently conceded that Polk's
was the only letter.
Unit 1. Neither the alleged complaint nor any other
grievance, as such, was ever submitted to management.
The only communication between the Union and Checker
over the take-home matter consisted of a letter from Polk
to Feldman, dated February 5, 1975.19 As the letter is
illuminating on more than one aspect of this case, I am
setting forth the text in full:
It has been brought to the attention of the Union that
the Company is attempting to negotiate separate
contracts with individual members of the Union. This is
in violation of the law and it violates the labor
agreement.
Our agreement does not expire for a period of three
years. It was also brought to the attention of the
Executive Board that some garage managers in Checker
Taxi are already charging $5.00 and $20.00 per week
for special privileges such as taking the cab home etc.
So, you see this idea is nothing new. It has been going
on all the time. The only differences is Checker Taxi
gets the pay off instead some of your garage managers.
It is my duty as Vice-President of this Union, to inform
Checker Taxi Inc. that we will not tolerate any further
violations of our contract or violations of the law.
On the same day that he sent the letter, and without
waiting for a reply from Feldman, Polk signed the charge
in the instant case, alleging that Checker was "negotiating
individual agreements with employees in violation of its
duty to bargain with the [Union]." On March 21, 1975, the
Regional Director informed Checker of his preliminary
determination to defer proceedings on the charge, pursuant
to Collyer, supra, if Checker would agree to arbitrate the
matter without regard to any time limitations on the filing
and processing of grievances to arbitration, within a
"reasonable period of time" after such deferral. By letter of
March 26, Feldman responded that Checker was willing to
arbitrate the matter if the Union filed an appropriate
grievance before April 5, 1976. The Regional Director
rejected Feldman's proposal, and thereafter, issued the
present complaint. The Company has extended its take-
home program to three other commission garages, and
about 100 drivers have opted to take their assigned cabs
home under that policy.
B. Analysis and Concluding Findings
Checker President Feldman testified that he did not
contact the Union before instituting the new policy
because "I didn't think it was anything we had to discuss
with the Union." He was wrong. The privilege of
employees to take home company vehicles is a mandatory
subject of bargaining, at least with respect to any change in
the employer's policy. Wil-Kil Pest Control Company, a
Division of Copesan Services, Inc., 181 NLRB 749, 751
(1970), enfd. 440 F.2d 371, 375 (C.A. 7, 1971).20 Checker's
new policy constituted a change in the status quo, whatever
that status quo might have been, and therefore Checker
20 Here, the facts are more compelling than in Wil-Kil, where the
employer's servicemen enjoyed a privilege which simply enabled them to
1354
YELLOW CAB COMPANY
was obligated to give the Union notice of and an
opportunity to bargain about the proposed change. It is
irrelevant, for the purpose of this obligation, that the
Company may have acted in a good-faith belief that it was
not obligated to bargain with the Union about the matter,
or that the new policy may have been beneficial to or in the
best interests of the drivers. N.LR.B. v. Katz, 369 U.S. 736,
743 (1962). Therefore, Checker violated Section 8(a)(5) and
(I) by instituting the new take-home program without
giving the Union either notice or an opportunity to bargain
about the matter. Additionally, by requiring its drivers, as a
condition of the take-home privilege, to sign the self-styled
"contract" which incorporated the unilaterally imposed
conditions for the privilege, the Company further violated
Section 8(a)(5) and (1) in that it bypassed the Union and
dealt directly with the employees concerning a mandatory
subject of bargaining. Anthony O. Grimaldi, d/b/a Superior
Rambler, 150 NLRB 1264, 1268 (1965). The Union's
acquiescence in a selective or arbitrary practice by some of
Checker's garage managers or dispatchers cannot be
deemed to constitute a waiver of the Union's right to
bargain over the new policy, or of the Company's
obligation to give notice and an opportunity to bargain.
New Orleans Board of Trade, Ltd., 152 NLRB 1258, 1259
(1965); see also, Armstrong Cork Company v. N.L.R.B. 211
F.2d 843, 848 (C.A. 5, 1954). As the court held in
Armstrong: "The statutory requirement of good faith
bargaining is not subject to waiver through action or
inaction of parties to a labor controversy, and may not be
satisfied by speculative assumptions as to acceptance or
refusal of an offer based on a party's attitude in prior
negotiations."
C. The Remedy
The more troublesome aspect of this case concerns the
remedy. General Counsel contends that as part of an
appropriate remedy Checker should be enjoined from
maintaining the new take-home program, and should be
directed to repay to its drivers the $10 per week collected
from them for the privilege of taking home their cabs.
However, the request for a reimbursement remedy rests on
two erroneous premises. First, General Counsel assumes
that prior to the new program there existed a uniform and
established practice whereby drivers were permitted to take
home their cabs without any charge. In fact, this was not
the case. Rather, the evidence indicates that at some
garages, some managers or dispatchers were permitting
favored drivers to take home their cabs, and that in many,
if not most, of these arrangements the drivers were required
to pay for the privilege, sometimes in amounts exceeding
$10 per week. Other than the hearsay testimony of Polk,
there is no evidence that any driver complained about the
imposition of the $10 fee, or that any driver other than
Davis was thereby being charged for a privilege which he
had previously enjoyed free of cost. In sum, no uniform,
travel to and from their homes, free of charge, and in the morning to
proceed directly from their homes to their routes to service customers. In the
present case, the drivers can and do use the take-home privilege as a means
of earning additional income, and, therefore, the privilege is related to the
subject of wages. In Wil-Kil, the Board found that the employer withdrew
established, or recognized practice existed prior to January
1975. Second, the evidence fails to indicate that the Union
objected to the $10 fee. In his testimony, Polk asserted in
sum that the new take-home program violated a past
practice which in essence amounted to a separate under-
standing or agreement between the Union and Checker,
and further violated article IV, section i(e) of the
collective-bargaining contract, which prohibits any deduc-
tions from the pay of the drivers, with exceptions not here
pertinent. However, in his letter to Feldman of February 5,
Polk indicated that the Union's only objection to the new
program was that Checker was "attempting to negotiate
separate contracts with individual members of the Union."
Indeed, Polk indicated that the Union was aware all along
that the drivers had been charged for the take-home
privilege, and had not objected to the practice. The Union
never asked to negotiate about the take-home program, nor
did it file any grievance. The timing of the letter suggests
that the Polk may simply have been laying the groundwork
for the unfair labor practice charge which was filed on the
same day. In sum, it is not clear just what the Union's
position was on the matter. In these circumstances, neither
reimbursement nor restoration of a nonexistent status quo
is warranted. "Restitution is not an automatic or inflexible
remedy to be imposed whenever the employer's unlawful
unilateral action has resulted in a detriment to the
employees." New Orleans Board of Trade, supra. Here, it is
even questionable whether the employees suffered a
detriment. Moreover, General Counsel does not contend,
nor does the evidence indicate, that Checker acted in bad
faith for an object of undermining the Union. Rather, the
evidence indicates that Checker, for economic reasons, set
a fee which it considered to be adequate compensation to
itself for the take-home privilege, and then acted in the
good-faith but mistaken belief that it was not required to
bargain about the matter. For this additional reason,
reimbursement is not warranted. New Orleans Board of
Trade, supra. However, I shall recommend that Checker be
ordered to cease and desist from unilaterally changing its
policies or practices with respect to the privilege of
commission drivers to drive their assigned taxicabs to and
from work, and from in any like or related manner
violating Section 8(aXS5) and (1) of the Act. I shall further
recommend that Checker be ordered to post the usual
notices, to bargain upon request with the Union concern-
ing said policies and practices, and, if requested by the
Union, to rescind its present program of permitting certain
employees to enjoy such privilege if they pay a fee and sign
a form which establishes certain rules and restrictions on
that privilege.
CONCLUSIONS OF LAW
1. Respondent Yellow and Respondent Checker are
both employers engaged in commerce within the meaning
of Section 2(6) and (7) of the Act.
the privilege for discriminatory reasons, in violation of Sec. 8(aX) I) and (3) of
the Act. However, neither the Board nor the court of appeals relied upon
this factor in concluding that the employer also violated Sec. 8(aX5) by
unilaterally changing the practice without notifying or bargaining with the
employees' representative.
1355
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All chauffeurs employed by Respondent Yellow, but
excluding all executive employees, clerical employees, and
all other employees, and guards and supervisors as defined
in the Act, constitute a unit appropriate for the purpose of
collective bargaining within the meaning of Section 9(b) of
the Act.
4. All chauffeurs employed by Respondent Checker,
but excluding executive employees, clerical employees, and
all other employees, and guards and supervisors as defined
in the Act, constitute a unit appropriate for the purpose of
collective bargaining within the meaning of Section 9(b) of
the Act.
5. At all times material, the Union has been, and is, the
exclusive collective-bargaining representative of the em-
ployees of Yellow and Checker in the respective units
described above.
6. The individuals who lease taxicabs from Respon-
dents Yellow and Checker are not employees within the
meaning of Section 2(3) of the Act.
7. Respondent Checker has engaged in and is engaging
in unfair labor practices within the meaning of Section
8(a)(l) and (5) of the Act, by instituting its new take-home
program without giving the Union either notice or an
opportunity to bargain about the matter, and by bypassing
the Union and dealing directly with its employees concern-
ing a mandatory subject of bargaining.
8. Respondents have not engaged in the unfair labor
practices alleged in the complaint in Cases 13-CA-14142
and-14143.
[Recommended Order omitted from publication.]
* U.S. Government Printing Office: 1977-261-294/3
1356