N.L.R.B. v. Warner

• Decision Date: 20 November 1978
• Docket Number: No. 78-1089,78-1089
• Citation: 587 F.2d 896
• Parties: 99 L.R.R.M. (BNA) 3307, 84 Lab.Cas. P 10,917 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. John WARNER, d/b/a D. J. W. Cartage, Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 896

587 F.2d 896

99 L.R.R.M. (BNA) 3307, 84 Lab.Cas. P 10,917

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. John WARNER, d/b/a D. J. W. Cartage, Respondent.

No. 78-1089.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 13, 1978.

Decided Nov. 20, 1978.

Jesse I. Etelson, Atty., N. L. R. B., Washington, D. C. (argued), John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Marjorie S. Gofreed, Atty., Washington, D. C., on brief, for petitioner.

Ralph E. Kennedy, St. Louis, Mo., argued and on brief, for respondent.

Before VAN OOSTERHOUT, Senior Circuit Judge, and LAY and BRIGHT, Circuit Judges.

VAN OOSTERHOUT, Senior Circuit Judge.

This case is before the Court upon the application of the National Labor Relations Board for enforcement of its orders ¹ against John Warner, doing business as D. J. W. Cartage ("the Company"). The Court has jurisdiction of the proceedings, the alleged unfair labor practices having occurred in Minneapolis, Minnesota, where the Company is engaged in a local cartage business. The Company utilizes the services of five truck drivers, four of whom are acknowledged to be employees. The status of the fifth driver, Wesley Warner, is in dispute.

On March 15, 1976, two of the Company's drivers began picketing the Company's premises with signs stating that the Union ² was striking for recognition. That day, and the day thereafter, Wesley Warner refused to cross the picket line to go to work. When the picketing ceased on March 16, the Company permitted the two strikers to return to work but refused to reinstate Wesley. On March 25, the Company sent Wesley a letter notifying him that his contract with the Company was terminated for his failure to perform his duties on March 15 and 16.

In the meantime, on March 15, the Company had filed a petition for an expedited election with the Board. In the election held March 19, two drivers voted for the Union and two voted against it. The Company challenged the ballot of Wesley Warner, claiming that he should not be allowed to vote because (1) he was an independent contractor and not an employee, and (2) he enjoyed a "special status" with the Company by virtue of the fact that he was the brother of the Company's owner, John Warner.

After a hearing before an Administrative Law Judge who determined that Wesley Warner was an employee and that his vote should be counted, the Regional Director opened the challenged ballot which was cast in favor of the Union. On February 8, 1977, the Union was certified as the collective bargaining representative of the Company's drivers. Thereafter, the Company refused to bargain with the Union. In the ensuing unfair labor practice proceedings, the Company repeated the contentions it had made in the representation proceedings and in addition argued that Wesley Warner's ballot should not have been counted because his relationship with the Company was terminated before his ballot was counted.

In the representation proceedings, the Board determined that Wesley Warner was an employee within the meaning of the Act. The Board also found that the Company discharged Wesley for honoring a lawful recognitional picket line in violation of Sections 8(a)(1) and (3). In the unfair labor practice proceeding, the Board found that the Company's admitted refusal to bargain with the Union violated Sections 8(a)(1) and (5).

The Company attacks the decisions of the Board on three related grounds. First, the Company contends that Wesley Warner was an independent contractor and therefore ineligible to vote in the representation election. Second, the Company argues that even if Wesley is an employee, he should not have been included in the bargaining unit because he enjoyed a special status with the Company by virtue of the fact that he is the brother of the Company's owner, John Warner. Third, the Company contends that Wesley's vote should not have been counted because Wesley had voluntarily relinquished any possible rights to reinstatement and backpay prior to the time his challenged ballot was counted. ³

I. Employee or Independent Contractor.

The Act does not define the term "employee" in detail. However, Section 2(3) provides that any "individual having the status of an independent contractor" shall not be considered an employee entitled to the protections of the Act. The Supreme Court has made it clear that the distinction between employees and independent contractors must be made by the application of general agency principles on a case-by-case basis. NLRB v. United Insurance Co., 390 U.S. 254, 256, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968). Traditionally, this inquiry has focused upon "the nature and amount of control reserved by the person for whom the work is done." Minnesota Milk Co. v. NLRB, 314 F.2d 761, 765 (8th Cir. 1965), quoting NLRB v. Phoenix Mut. Life Ins. Co., 167 F.2d 983, 986 (7th Cir. 1948). It is the Right to control which is the determining element. NLRB v. Phoenix Mut. Life Ins. Co., supra,167 F.2d at 986; Azad v. United States, 388 F.2d 74, 76 (8th Cir. 1968); NLRB v. Cement Transport Inc., 490 F.2d 1024, 1027 (6th Cir. 1974). All of the incidents of the individual's relationship must be assessed and weighed with no one factor being decisive. These factors include

the right to hire and discharge persons doing the work, the method and determination of the amount of the payment to the workmen, whether the person doing the work is engaged in an independent business or enterprise, whether he stands to make a profit on the work of those under him, the question of which party furnishes the tools or materials with which the work is done, and who has control of the premises where the work is done. In addition . . . consideration must be given to other factors, such as whether the relationship is of a permanent character, the skill required in the particular occupation, and who designates where the work is to be performed.

Minnesota Milk Co. v. NLRB, supra, 314 F.2d at 765.

Since agency principles are to be applied, we must examine the nature of the Company's operations and Wesley Warner's working relationship with the Company. The Company has engaged in the cartage business for over a decade. Its principal revenues derive from a contract entered into with Airborne Freight Corporation, a domestic and international freight forwarder. Under this contract the Company is obligated to act as an independent cartage agent providing pickup, transportation and delivery service of air freight in the Minneapolis area. The contract states that the Company has sole discretion and control over the manner and means of its performance, including but not limited to the selection and supervision of the Company's employees. The Company hired five drivers to haul the air freight. Four of these drivers operated Company-owned trucks, while the fifth, Wesley Warner, operated his own truck.

The record reveals that all five drivers worked substantially the same hours and performed precisely the same work. At approximately 7:30 each morning, the drivers were required to report to John Warner who would distribute the bills of lading for the freight to be delivered. Each driver was assigned a specific geographic area in which he was to make deliveries and pickups. These areas were "exclusive" to each driver, but occasionally John Warner would direct a driver to make a pickup or delivery in an area assigned to another driver if the latter were unable to complete his work. After the drivers delivered the freight assigned to them in the morning, they were required to report back to John Warner at noon to receive bills of lading for freight that had arrived while they were on the road. Although the Company did not require the drivers to make their deliveries in a specific order, the drivers were not free to decide to deliver freight on a day other than the one on which it was assigned to them. The drivers were also required to notify John Warner if they were to be absent or late in reporting at any time. In the event that a driver went on vacation or otherwise could not report for work, John Warner would fill in and make deliveries in that driver's area. None of the drivers were permitted to hire replacement drivers.

Due to the routine nature of the work performed by the drivers, little supervision of their activities was necessary. However, John Warner monitored and regulated the conduct of the drivers toward customers, their use of their two-way radios, and their daily routine and delivery deadlines. When the Company received complaints concerning the drivers' actions, John Warner would "talk" to the offending drivers to ensure that the conduct giving rise to the complaints was not repeated.

The drivers were paid according to the number of bills of lading they handled and returned to the Company. No deductions for taxes, social security, insurance or pension programs were made from the drivers' paychecks. Nor did any driver receive paid vacations or extra money for working holidays.

In all of the above respects, the working relationship of Wesley Warner with the Company was virtually identical to that of the other drivers. In some respects, however, Wesley's position was unique. Wesley began hauling freight for the Company in 1966, a time when all the Company's drivers operated their own trucks. By the time of Wesley's discharge in 1976, none of the other drivers had worked for the Company for more than three years and all but Wesley operated Company-owned trucks. Unlike these other drivers, Wesley worked under three written contracts executed in 1969 and 1970. All three contracts contained substantially the same provisions. They recited that Wesley was to be an "independent contractor" and provided that he was to furnish, at his own expense, his own vehicle, insurance covering that vehicle, and all licenses and...