N.L.R.B. v. O'Hare-Midway Limousine Service, Inc., HARE-MIDWAY

• Decision Date: 06 February 1991
• Docket Number: 90-1344,Nos. 90-1147,HARE-MIDWAY,s. 90-1147
• Citation: 924 F.2d 692
• Parties: 136 L.R.R.M. (BNA) 2504, 118 Lab.Cas. P 10,551 NATIONAL LABOR RELATIONS BOARD, Petitioner, Cross-Respondent, v. O'LIMOUSINE SERVICE, INC., Respondent, Cross-Petitioner.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 692

924 F.2d 692

136 L.R.R.M. (BNA) 2504, 118 Lab.Cas. P 10,551

NATIONAL LABOR RELATIONS BOARD, Petitioner, Cross-Respondent, v. O'HARE-MIDWAY LIMOUSINE SERVICE, INC., Respondent, Cross-Petitioner.

Nos. 90-1147, 90-1344.

United States Court of Appeals Seventh Circuit.

Argued Oct. 22, 1990.

Decided Feb. 6, 1991.

Barbara A. Atkin, Washington, D.C., Elizabeth Kinney, Chicago, Ill., Aileen A. Armstrong, Barbara Sapin, William A. Baudler, N.L.R.B., Appellate Court, Enforcement Litigation, Washington, D.C., for petitioner.

Michael A. Abramson, Gail Galante, Chicago, Ill., for respondent.

Before BAUER, Chief Judge, EASTERBROOK, Circuit Judge, and WILL, Senior District Judge. ^*

WILL, Senior District Judge.

O'Hare-Midway Limousine Service, Inc. asks us to set aside an order of the National Labor Relations Board ("Board") affirming the Administrative Law Judge's ("ALJ") decision that a Company driver, Kenneth Berg, was not an independent contractor and finding that the Company had violated the National Labor Relations Act ("Act"), 29 U.S.C. Sec. 151 et seq., by denying Berg a shift change, interrogating him and finally discharging him. The General Counsel has filed a cross-petition for enforcement of the order. We affirm the Board and order enforcement.

I

O'Hare-Midway Limousine Service, Inc. (O'Hare-Midway or Company) operates a limousine service primarily serving passengers traveling to and from O'Hare and Midway airports. The Company dispatches In June 1987, Berg became involved in organizing activities in support of an affiliate of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO ("Union"). Berg signed a union authorization card and distributed cards to other drivers at O'Hare Airport. The Union filed a representation petition with the Board's Chicago regional office on August 10, 1987 seeking a unit consisting of drivers of vehicles owned, leased and managed by the Company. In September, Berg attended a pre-election representation petition hearing on the Union's behalf. The Regional Director ordered an election after O'Hare-Midway unsuccessfully attempted to procure dismissal of the Union's representation petition on the basis that all of its drivers were independent contractors. The Board denied O'Hare-Midway's request to review the Regional Director's decision but ordered drivers of managed cars to be excluded from the unit. An election was held on December 12 and 14, 1987, during which Berg acted as a union observer.

three categories of limousines: vehicles owned or leased by the Company (company cars), vehicles managed by the company but owned by other companies or individuals (managed cars), and cars driven by owner-operators. Kenneth Berg was a driver for the company during several different periods, the last beginning in March 1985. During most of his tours of duty Berg drove a company car.

Berg filed unfair labor practice charges against O'Hare-Midway in January 1988 alleging that the Company had violated Sec. 8(a)(1) of the Act by interrogating him regarding his union activities and Sec. 8(a)(1) and (3) of the Act by discriminatorily refusing to grant him a shift change. After a hearing was held on these charges, O'Hare-Midway terminated Berg's employment and he subsequently filed an unfair labor practice charge challenging his discharge. On June 28, a hearing was held before ALJ Nancy M. Sherman consolidating all of Berg's unfair labor practice claims. She concluded that: (1) Berg was an employee as defined by Section 2(3) of the Act; (2) O'Hare-Midway had violated Section 8(a)(1) of the Act by interrogating Berg about union activity; (3) O'Hare-Midway had violated Section 8(a)(1) and (3) by refusing Berg's requested shift change; and (4) O'Hare-Midway had violated Section 8(a)(1), (3) and (4) of the Act by discharging Berg. She entered a cease and desist order against the Company and ordered that Berg be reinstated to the same or a substantially equivalent job with the shift schedule he was refused and back pay.

On June 15, 1989 the Board entered an order adopting the ALJ's recommended order in full. We must enforce the Board's order if, after viewing the record as a whole, it is supported by substantial evidence. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

II

Independent contractors are exempt from NLRB jurisdiction under Section 2(3) of the Act. 29 U.S.C. Sec. 152(3). ¹ Whether an individual is an employee under the Act requires a fact-bound determination applying common law principles of agency. NLRB v. United Insurance Co. of America, 390 U.S. 254, 258, 88 S.Ct. 988, 990, 19 L.Ed.2d 1083 (1968). Such an inquiry centers on the employer's ability to control the purported employee. E.g., NLRB v. Sachs, 503 F.2d 1229, 1233 (7th Cir.1974). The word "control" suggests the need for an examination of many characteristics of an employer-worker relationship which may include: how payment for services is determined; whether the employer provides benefits; who provides the tools and other materials to perform the work; who designates where work is done and whether the relationship is temporary The Regional Director's decision, upon which the ALJ relied, cites numerous aspects of O'Hare-Midway's relationship with its drivers which provide ample support for the Board's conclusion that Berg was an employee. When O'Hare-Midway's drivers are first employed they may select the a.m., p.m. or all-day shift, but a driver may not change his or her work schedule, or terminate a shift early, without the Company's permission. Drivers keep only 40 percent of the gross fares they take in and they must turn in the remaining 60 percent to O'Hare-Midway. The drivers are required to adhere to company rules regarding the manner in which they collect fares and service passengers, including maintaining records of each fare received. O'Hare-Midway has the right to fine or reprimand the drivers for failure to comply with company procedures and the Company also retains discretion to refuse to provide a driver with a vehicle. All drivers must also follow a mandatory dress code which requires them to wear a black suit, dark tie and a white shirt. Although drivers buy their own gasoline and absorb the losses for delinquent passengers, and although the Company provides no benefits to its drivers, makes no deductions for social security and does not withhold state and local income taxes, on balance, the evidence was substantial that Berg was not an independent contractor.

or permanent. See Wardle v. Central States Southeast and Southwest Areas Pension Fund, 627 F.2d 820, 824 (7th Cir.1980); North American Van Lines v. NLRB, 869 F.2d 596, 599-600 (D.C.Cir.1989), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981). The core question is whether the employer controls the manner and means by which work is performed. Sachs, 503 F.2d at 1233.

Cases cited by O'Hare-Midway holding that lessee cab drivers are independent contractors do not compel a different result. See Local 777, Democratic Union Organizing Committee, Seafarers International Union of North America v. NLRB, 603 F.2d 862 (D.C.Cir.1978); Yellow Taxi Cab of Minneapolis v. NLRB, 721 F.2d 366 (D.C.Cir.1983); NLRB v. Associated Diamond Cabs, 702 F.2d 912 (11th Cir.1983). The decisive factor in those cases was the lack of any financial interdependence between the taxicab companies and the cab drivers. The cab companies earned the same income irrespective of any individual driver's fare intake since the companies profited solely from lease contracts with the drivers, and the cab drivers did not account for their earnings nor did the companies control the hours the lessee drivers operated the leased cabs. By contrast, O'Hare-Midway has a direct financial stake in the amount of fares collected by its drivers, requires extensive reporting of each driver's productivity and the Company determines the hours its drivers may work. Unlike the taxicab companies, O'Hare-Midway has significant control over the manner and means by which its drivers perform their jobs.

We conclude there is substantial evidence to uphold the Board's conclusion that Berg was an employee under the Act.

III

O'Hare-Midway argues that, assuming Berg is an employee, it did not commit an unfair labor practice by denying Berg a shift change. The facts relevant to the refusal of the shift change are essentially as follows. When Berg was hired by O'Hare-Midway he was scheduled to work the all-day shift, which runs from 5 a.m. until as late as 11 p.m. or when the drivers are released in the evening by the Company's dispatcher. In August 1987, Berg was permitted to switch to the a.m. shift by the Company operations manager, Neal Mehr. Two months later, and one month after Berg attended the pre-election hearing, Berg asked to return to the all-day shift. Mehr refused. In December, soon after the representation election, Berg again asked to be put back on the all-day shift and again this request was denied. Mehr never gave Berg a reason for his refusals to grant the shift change.

The General Counsel is required to demonstrate that O'Hare-Midway was at least partially motivated by Berg's union activity The ALJ discredited Mehr's testimony that he denied the shift change because the Company was no longer scheduling all-day drivers. The record substantially supports her conclusion. Mehr's statements were not corroborated by any other evidence and Mehr himself offered conflicting testimony about the status of all-day drivers, testifying on the same day that the Company was no longer using all-day drivers but then contradicting himself by stating that there was a need for all-day drivers. The ALJ also discredited the Company's witnesses regarding Berg's drinking and work record, noting that the Company never confronted him with a drinking problem and never disciplined him or gave him any sort of warning about...