C.C. Eastern, Inc. v. N.L.R.B., 94-1115

Citation60 F.3d 855
Decision Date01 August 1995
Docket NumberNo. 94-1115,94-1115
Parties149 L.R.R.M. (BNA) 2973, 314 U.S.App.D.C. 12, 130 Lab.Cas. P 11,384 C.C. EASTERN, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

Jeffrey L. Braff, Philadelphia, PA, argued the cause and filed the briefs, for petitioner.

Deborah E. Shrager, Atty., N.L.R.B., Chicago, IL, argued the cause for respondent. With her on the brief, were Linda R. Sher, Acting Associate Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel and Linda Dreeben, Supervisory Atty., N.L.R.B., Washington, DC.

Before SILBERMAN, BUCKLEY and GINSBURG, Circuit Judges.

GINSBURG, Circuit Judge:

C.C. Eastern, Inc., a cartage company, petitions for review of (1) an order of the National Labor Relations Board denying its claim that certain drivers are independent contractors and not employees covered by the National Labor Relations Act, and of (2) a subsequent Board order holding that the Company violated Secs. 8(a)(1) and (5) of the Act, 29 U.S.C. Secs. 158(a)(1), (5), when it refused to bargain with the union that the drivers elected as their bargaining representative. We agree with the Company that the drivers are independent contractors and therefore grant its petition, deny the Board's cross-application for enforcement, and vacate both orders.

I. BACKGROUND

Central Transport, Inc. carries freight between North Brunswick, New Jersey and distant cities. Its affiliate, C.C. Eastern, Inc., provides local pick-up and delivery service from its terminal in North Brunswick. Fourteen drivers perform the local pick-ups and deliveries.

In December 1991, Local 701 of the International Brotherhood of Teamsters filed a petition with the NLRB seeking to represent "[a]ll drivers employed by [Central Transport] at its North Brunswick New Jersey" terminal. The NLRB rejected that petition because Central was not the Employer at that location, and the Union subsequently filed a new representation petition identifying Eastern as the Employer. Eastern challenged the new petition upon the ground that the drivers are independent contractors and hence not covered by the Act, but the Regional Director of the NLRB rejected that claim and ordered that a representation election go forward. 309 N.L.R.B. 1071 (1992). The Board affirmed that decision, 309 N.L.R.B. 1070 (1992), and the drivers at the North Brunswick terminal elected the Union to represent them in collective bargaining. In order to preserve for judicial review its claim that the drivers are not "employees" within the coverage of the Act, the Company refused to bargain with the Union. The Board then ruled that the Company had thereby violated Secs. 8(a)(1) and (5) of the Act and ordered it to bargain, 313 N.L.R.B. 632, 1994 WL 43674 (1994), and the Company now petitions this court for review.

II. ANALYSIS

The Company's principal contention is that the 14 drivers are not employees but rather independent contractors. The Company also argues in the alternative that the Board improperly denied its request to present certain evidence bearing upon the proper characterization of the drivers' status. Because we agree with the Company that the drivers are not employees, we do not reach the evidentiary issue.

A. Relevant Principles of Law

The jurisdiction of the NLRB extends only to the relationship between an employer and its "employees"; it does not encompass the relationship between a company and its "independent contractors." North Am. Van Lines, Inc. v. NLRB, 869 F.2d 596 597 (D.C.Cir.1989) (hereinafter "NAVL"); see also 29 U.S.C. Sec. 152(3). Therefore, the characterization of a group of workers as "employees" or as "independent contractors" is dispositive of the question whether they may elect a bargaining representative through the processes of the NLRB.

Although the Board must decide in the first instance whether individuals claiming the protection of the NLRA are employees or independent contractors, the Act requires the Board to resolve that question by reference to the common law of agency. NLRB v. United Ins. Co. of Am., 390 U.S. 254, 256, 88 S.Ct. 988, 989-90, 19 L.Ed.2d 1083 (1968). The application of the law of agency to established and undisputed findings of fact "involve[s] no special administrative expertise that a court does not possess," id. at 260, 88 S.Ct. at 991-92; we therefore "need not accord the Board's decision that special credence which we normally show merely because it represents the agency's considered judgment." Local 777, Democratic Union Organizing Committee, Seafarers Int'l Union of North Am. v. NLRB, 603 F.2d 862, 872 (D.C.Cir.1979) (hereinafter "Seafarers "). Even that does not mean, however, that we review the Board's determination de novo: We will still uphold the Board if it can be said to have "made a choice between two fairly conflicting views." NAVL, 869 F.2d at 599.

Whether a worker is an independent contractor or an employee is a function of the amount of control that the company has over the way in which the worker performs his job. Seafarers, 603 F.2d at 872-74. As the Board itself has explained:

[A]n employer-employee relationship exists when the employer reserves not only the right to control the result achieved, but also the means to be used in attaining the result. On the other hand, when the employer has reserved only the right to control the ends to be achieved, an independent contractor relationship exists.

Twin City Freight, Inc., et al., 221 N.L.R.B. 1219, 1220, 1975 WL 6567 (1975). Although this "right-to-control" test requires an evaluation of all the circumstances surrounding the relationship between the company and the worker, "the extent of the actual supervision exercised by a putative employer over 'the means and manner' of the workers' performance is the most important element to be considered." Seafarers, 603 F.2d at 873 (emphasis in original). It is important, however, to distinguish such company supervision from company efforts merely "to monitor, evaluate, and improve the results or ends of the worker's performance." NAVL, 869 F.2d at 599. Supervision of the "means and manner" of the worker's performance renders him an employee, while steps taken to "monitor, evaluate, and improve the results" of his work, without supervision over the means by and manner in which he does his work, indicates that the worker is an independent contractor. See City Cab of Orlando, Inc. v. N.L.R.B., 628 F.2d 261, 264 (D.C.Cir.1980).

B. The Evidence

In this case, the Company's actual supervision over the means and manner of the drivers' performance was at most minimal. As reflected in the report of the Regional Director, the Company does not (1) set specific work hours for the drivers; (2) exercise any control over the drivers' dress or appearance; or (3) have a conventional disciplinary system (as opposed to the Quality Contractor Award program, of which more below). 309 N.L.R.B. at 1071. In addition, it is undisputed that each driver uses his own tractor to haul the Company's freight and, while the tractor must be suitable for the task at hand (i.e., for the ends of the job), the Company does not require the tractors to be of any specific type, size, or color. The Company also leaves it to the drivers to decide when and whether to perform maintenance and repair work on the tractors, the cost of which the drivers bear.

The record also reflects various other aspects of the relationship between the Company and the drivers indicative of their status as independent contractors: (1) the drivers own the tools of their trade (i.e., the tractors, valued at $20,000-$40,000); (2) the Company does not provide the drivers with any of the benefits commonly offered to employees, such as health or life insurance, nor does it even withhold income tax from their pay; (3) the drivers are paid by the job rather than by the hour; (4) the contract between the Company and each individual driver characterizes the driver as an independent contractor; and (5) the drivers retain the rights, as independent entrepreneurs, to hire their own employees to drive the tractors for them, to lease out their tractors for use by others, or to use their tractors during non-business hours to haul for anybody other than a direct competitor of the Company. Although less important to our determination of the drivers' status than is the absence of evidence that the Company supervises the means and manner of their work, these factors do have some probative weight and each points decidedly in the direction of the drivers being independent contractors. See NAVL, 869 F.2d at 599-600.

The Board does not dispute the foregoing facts. Instead it offers other evidence meant to show that the Company exerts substantial control over the means by and manner in which the drivers perform their work, and attempts to distinguish those cases in which similarly situated workers were held to be independent contractors. Neither of these efforts succeeds.

First, the Board claims that the Company substantially controls the order in which the drivers make their deliveries and in that way controls the means by and manner in which they do their jobs. Although the Company does assign each driver to a specific delivery area each day, we also see in the record that the drivers retain a substantial amount of flexibility in deciding how best to go about accomplishing their assigned task. The Company's dock contractor simply places the freight into trailers in the order in which it comes into the terminal overnight. Id. at 1072. While some drivers deliver the freight in the order in which it was loaded (i.e.,...

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