Local 24 International Brotherhood of Teamsters, Chauffeurs Warehousemen and Helpers of America v. Oliver

• Decision Date: 19 January 1959
• Docket Number: AFL-CIO,No. 49,49
• Citation: 358 U.S. 283,79 S.Ct. 297,3 L.Ed.2d 312
• Parties: LOCAL 24 of the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,, et al., Petitioners, v. Revel OLIVER, A.C.E. Transportation Company, Inc., and Interstate Truck Service, Inc
• Court: U.S. Supreme Court

358 U.S. 283

79 S.Ct. 297

3 L.Ed.2d 312

LOCAL 24 of the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, et al., Petitioners,

v Revel OLIVER, A.C.E. Transportation Company, Inc., and Interstate Truck Service, Inc.

No. 49.

Argued Dec. 10, 11, 1958.

Decided Jan. 19, 1959.

Mr. David Previant, Milwaukee, Wis., for petitioners.

Mr. Stanley Denlinger, Akron, Ohio, for respondent Revel Oliver.

Mr. Charles R. Iden, Akron, Ohio, for respondents A.C.E. Transp. Co., Inc., and Interstate Truck Service, Inc.

Mr. Justice BRENNAN delivered the opinion of the Court.

As the result of multiemployer, multistate collective bargaining with the Central States Drivers Council, comprising local unions of truck drivers affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers, a collective bargaining agreement, the 'Central States Area Over-the-Road Motor Freight Agreement,' effective February 1, 1955, and expiring January 31, 1961, was entered into by the locals and motor carriers in interstate commerce who operate under the authority of the Interstate Commerce Commission¹ in 12 midwestern States, including Ohio. ² Article XXXII of this collective bargaining agreement³ prescribes terms and conditions which regulate the minimum rental and certain other terms of lease when a motor vehicle is leased to a carrier by an owner who drives his vehicle in the carrier's service.⁴ The Ohio courts enjoined the petitioner, Ohio's Teamsters Local 24 and its president, and the respondent carriers, A.C.E. Transportation Company, Inc., and Interstate Truck Service, Inc., Ohio employers, from giving effect to the provisions of Article XXXII. The Ohio courts held that the Article violates the Ohio antitrust law, known as the Valentine Act.⁵ The question is whether the fact that the Article was contained in an agreement which was the fruit of the exercise of collective bargaining rights under the National Labor Relations Act⁶ precluded the Ohio courts from applying the Ohio antitrust law to prohibit the parties from carrying out the terms of the Article they had agreed upon in bargaining. No claim is made that Article XXXII violates any provision of federal law.

The Article is in express terms made applicable only to a lessor-driver when he himself drives his vehicle in the business of the lessee-carrier. § 1. The Article, at least in words, constitutes the lessor-driver an employee of the carrier at such times: 'The employer (the carrier) expressly reserves the right to control the manner, means and details of, and by which, the owner-operator performs his services, as well as the ends to be accomplished.' § 4. His wages, hours and working conditions are then to be those applied to the carrier's drivers of carrier-owned vehicles, and he has 'seniority as a driver only.' § 2. He must operate his vehicle at such times 'exclusively in * * * (the carrier's) service and for no other interests.' § 1. The carrier 'agrees to pay * * * social security tax, compensation insurance, public liability and property damage insurance, bridge tolls' and various other fees imposed on motor freight transportation, except 'that the owner-driver shall pay license fees in the state in which title is registered.' § 10. The lessor-driver must be compensated by 'separate checks * * * for driver's wages and equipment rental.' § 6. The wage payment must be in the amount of 'the full wage rate and supplementary allowances' payable to carrier drivers similarly circumstanced who dirve carrier-owned vehicles. § 12(a). The equipment rental payment must be in an amount not less than 'the minimum rates' specified by the Article which 'result from the joint determination of the parties that such rates represent only the actual cost of operating such (leased) equipment. The parties have not attempted to negotiate a profit for the owner-driver.' § 12(b). All leases by union members who drive their vehicles for carriers in effect on the operative date of the collective bargaining agreement are to 'be dissolved or modified within thirty (30) days' to conform to the terms and conditions of the Article. § 15. The parties declare that 'the intent of this clause (the Article) * * * is to assure the payment of the Union scale of wages * * * and to prohibit (a carrier from) the making and carrying out of any plan, scheme or device to circumvent or defeat the payment of wage scales provided in this Agreement. * * * (and) to prevent the continuation of or formation of combinations or corporations or so-called lease of fleet arrangements whereby the driver (of his own vehicle) is required to and does periodically pay losses sustained by the corporation or fleet arrangement, or is required to accept less than the actual cost of the running of his equipment, thus, in fact, reducing his scale of pay.' § 16.

The respondent, Revel Oliver, a member of the union, is the owner of motor equipment⁷ which, at the time the collective bargaining agreement was negotiated, was subject to written lease agreements with the carrier respondents, A.C.E. Transportation Company, Inc., and Interstate Truck Service, Inc. The terms and conditions of the leases, particularly in regard to rental compensation, differ substantially from those provided in Article XXXII.⁸

Oliver brought this action on January 20, 1955, in the Court of Common Pleas, Summit County, Ohio, for an injunction restraining the petitioners and the respondent carriers from carrying out the terms of Article XXXII. He obtained a temporary restraining order upon sworn allegations. At the trial the respondent carriers joined with Oliver in making the attack on the Article. The petitioners defended on the ground that the State could not lawfully exercise power to apply its antitrust law to cause a forfeiture of the product of the exercise of federally sanctioned collecive bargaining rights. The union justified the Article as necessary to prevent undermining of the negotiated drivers' wage scale said to result from a practice of carriers of leasing a vehicle from an owner-driver at a rental which returned to the owner-driver less than his actual costs of operation, so that the driver's wage received by him, although nominally the negotiated wage, was actually a wage reduced by the excess of his operating expenses over the rental he received. The Court of Common Pleas held in Oliver v. All-States Freight, 156 N.E.2d 176, that the National Labor Relations Act could not 'be reasonably construed to permit this remote and indirect approach to the subject of wages,' and that Article XXXII was in violation of the State's antitrust law because 'there are restrictions and restraints imposed upon articles (the leased vehicles) that are widely used in trade and commerce. * * * (and) preclude an owner of property from reasonable freedom of action in dealing with it.' On the petitioners' appeal to Ohio's Ninth Judicial District Court of Appeals that court heard the case de novo and affirmed the judgment of the Court of Common Pleas, adopting its opinion. 156 N.E.2d 190. The Court of Appeals entered a permanent injunction perpetually restraining the petitioners and the respondent carriers (1) 'from entering into any agreements * * * or carrying out the * * * requirements * * * of any such agreement, which will require the alteration' of Revel Oliver's 'existing lease or leasing agreement'; (2) 'from entering into any * * * agreement or stipulation in the future, or the negotiation therefor, the * * * tendency of which is to * * * determine in any manner the rate to be charged for the use of' Revel Oliver's equipment; (3) 'from giving force and effect to Section 32 (sic) of the Contract * * * or any modification * * * thereof, the * * * tendency of which shall attempt to fix the rates' for the use of Revel Oliver's equipment.⁹ Petitioners' appeal to the Ohio Supreme Court was dismissed for want of a debatable constitutional question. 167 Ohio St. 299, 147 N.E.2d 856. We granted certiorari to consider the important question raised of the interaction of state and federal power arising from the petitioners' claim that the Ohio regulation abridges rights protected by federal statute. 356 U.S. 966, 78 S.Ct. 1007, 2 L.Ed.2d 1073.

Article XXXII did not originate with the 1955 agreement. The carriers and the union have disputed since 1938 the terms of a carrier's hire of a lessor's driving services with his leased vehicle. The usual lease is by the owner of a single vehicle who hires out his services as driver with his vehicle. A carrier's representative who has participated in all contract negotiations since those leading to the 1938 agreement testified to the history. According to him, the nub of the union's position over the two decades has been that the carriers abuse the leasing practice, particularly by paying inadequate rentals for the use of leased vehicles, with the result 'that part of the men's wages for driving was being used for the upkeep of their vehicles * * *. They (the union) claimed that the leased people were breaking down the rate structure * * *.' The union's demands for contract provisions to safeguard against the alleged abuse were designed also to 'secure a living wage (for the lessor) plus an adequate rental for his equipment.' A minimum rental clause first appeared in the 1938 agreement which also contained provisions comparable to §§ 8, 10 and 14 of present Aticle XXXII. In 1939, after the union claimed that 'there was a lot of people that was transferring their title into other people's name to avoid the conditions of the contract,' § 3 was added to provide that 'certificate and title to the equipment must be in the name of the actual owner.' When the dispute brought the parties to the verge of a strike in 1941, the note to § 1 and §§ 13, 15, 16, 17 and 18 came into the agreement. But by 1946 the controversy reached a pitch where the union demanded...