N.L.R.B. v. Amber Delivery Service, Inc., 80-1623

• Decision Date: 11 June 1981
• Docket Number: No. 80-1623,80-1623
• Citation: 651 F.2d 57
• Parties: 107 L.R.R.M. (BNA) 3067, 91 Lab.Cas. P 12,811 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. AMBER DELIVERY SERVICE, INC., Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 57

651 F.2d 57

107 L.R.R.M. (BNA) 3067, 91 Lab.Cas. P 12,811

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. AMBER DELIVERY SERVICE, INC., Respondent.

No. 80-1623.

United States Court of Appeals First Circuit.

Argued March 3, 1981.

Decided June 11, 1981.

W. Christian Schumann, Washington, D.C., with whom William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Sandra Shands Elligers, Washington, D.C., were on brief, for petitioner.

Lawrence M. Siskind, Brockton, Mass., with whom Robert H. Greene, Brockton, Mass., was on brief, for respondent.

Before BOWNES and BREYER, Circuit Judges, and WYZANSKI, Senior District Judge. ^*

BREYER, Circuit Judge.

In a decision and order dated June 24, 1980, the National Labor Relations Board ruled that respondent Amber Delivery Service, Inc. (Amber) had committed several unfair labor practices in violation of section 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (3) (1970). Specifically, the Board found that Amber had (1) impermissibly interrogated and solicited help from employees in an effort to forestall union organizing activities; (2) imposed one-day suspensions on three employees in retaliation for their union activities; and (3) instituted changes in working conditions in an unlawful attempt to convert its employees to independent contractors and thereby deprive them of their statutory right to union representation. Underlying these findings was the Board's preliminary determination that Amber's "employees" in fact enjoyed such status rather than that of "independent contractors" and thus were entitled to the Act's protection. Upon concluding that the unfair practices were indicative of a pervasive and ongoing antiunion animus on the part of Amber, the Board ruled that a fair election was unlikely and that a bargaining order was necessary. It now petitions for enforcement of its order. We affirm the Board's findings of various unfair labor practices but vacate the bargaining order, finding Amber's actions insufficiently coercive to warrant this extraordinary mandate.

I. Background

Amber operates a package-delivery service, concentrated in the Boston area, which specializes in same-day pickup and delivery. During the relevant period, it employed sixteen to eighteen drivers, of whom approximately half worked as "call" drivers and half as "distribution" drivers. The call drivers were essentially free-floating; they picked up packages at designated locations and delivered them to others in accordance with customer orders typically received over a two-way radio from the company dispatcher. The distribution drivers, by contrast, each serviced a specific geographic area, making a daily delivery to customers within that area of packages that had earlier been deposited at Amber's terminal. Both groups of drivers were paid a commission equal to one-third of their daily gross revenues.

In the fall of 1976, Amber decided to convert all of its drivers to owner-operator status, reasoning that such a change would boost productivity and increase profits for company and driver alike. Three steps were required of each driver: (1) purchase of his own vehicle; (2) acquisition of contract carrier authority from the Massachusetts Department of Public Utilities; and (3) execution of a contract carrier agreement with the company. Commissions were increased to fifty percent for call drivers and up to sixty-five percent for distribution drivers depending upon the area served. Amber's president initially designated March 31, 1977 as the deadline for conversion, warning that all who failed to comply would be discharged. By that date, all but five or six drivers were fully converted. Because these remaining drivers claimed to be temporarily unable, rather than entirely unwilling, to undertake the conversion, the deadline was extended. However, on June 15, 1977, the four remaining holdouts were discharged ¹ and the conversion to owner-operator status was complete.

In mid-April of that year, two drivers apparently disgruntled with this change in status and with a recently implemented twenty percent reduction in rates (and thus commissions) contacted a representative of the local teamsters union. ² Each of them signed a union authorization card designating the union as his "sole and exclusive representative for the purposes of collective bargaining" with Amber, and they each solicited and obtained, over the next several weeks, signed authorization cards from other drivers. On May 11, the union filed a petition with the Board's regional office requesting an election in an employee unit consisting of Amber's drivers and warehousemen. A representation hearing was held several weeks later devoted primarily to whether the drivers in their new role as owner-operators constituted employees or independent contractors. This determination was necessitated by section 2(3) of the Act, which specifically excludes from the definition of "employee" and thus from statutory coverage any "individual having the status of an independent contractor." 29 U.S.C. § 152(3) (1970). While the regional director's decision was pending, the union on June 20 called a strike at Amber's facility to protest the dismissal of the four drivers who had not converted to owner-operator status. On July 29, the regional director issued his decision, finding that the drivers were employees and directing that an election be held in a unit consisting of "all distributor and call deliverymen." ³

Thereafter, in a rather confusing maneuver described in greater detail below, Amber on August 9 moved for reconsideration by the regional director, representing that various "modifications" had been made in the drivers' working conditions, which were sufficient to convert the drivers to independent contractors. On August 26, the regional director vacated his Decision and Direction of Election and reopened the hearing to receive additional evidence "with respect to purported changes made by the Employer in its relationship with its owner-operators." A hearing was conducted on September 1 and 30. On October 12, the union filed the unfair labor practice charges at issue here, challenging the propriety of these "modifications" as well as other actions earlier undertaken by Amber. The regional director has held the representation proceeding in abeyance pending resolution of these charges.

II. The Drivers' Status Before August 9

We must first decide whether the Board correctly held that, prior to August 9, Amber's drivers were employees and not independent contractors. It is well-established that general principles of agency law govern the distinction between employee and independent contractor for purposes of the Act. E. g., NLRB v. United Ins. Co., 390 U.S. 254, 256, 88 S.Ct. 988, 989, 19 L.Ed.2d 1083 (1968); Seven-Up Bottling Co. v. NLRB, 506 F.2d 596, 597 (1st Cir. 1974). The House Report on the legislation specifically excluding "independent contractor" from the definition of "employee" outlined this distinction as follows:

"Employees" work for wages or salary under direct supervision. "Independent contractors" undertake to do a job for a price, decide how the work will be done, usually hire others to do the work, and depend for their income not upon wages, but upon the difference between what they pay for goods, materials, and labor and what they receive for the end result, that is, upon profits.

H.R.Rep.No.245, 80th Cong., 1st Sess. 18 (1947), reprinted in 1 Legislative History of the Labor Management Relations Act, 1947, at 309 (1948). Thus the Board, in applying the common law test of independence, has looked to the right of control: whether the putative employer has the right to control not only the results sought but also the means by which those results are achieved. E. g., Merchants Home Delivery Service, Inc. v. NLRB, 580 F.2d 966, 973 (9th Cir. 1978); Seven-Up Bottling Co. v. NLRB, 506 F.2d at 597-98; News Syndicate Co., 164 N.L.R.B. 422, 423 (1967). It has also looked to the risk of loss and opportunity for profit and to the degree of "proprietary" interest in, for example, a route or a dealership. E. g., Brown v. NLRB, 462 F.2d 699, 705 (9th Cir.), cert. denied, 409 U.S. 1008, 93 S.Ct. 441, 34 L.Ed.2d 301 (1972); El Mundo, Inc., 167 N.L.R.B. 760, 761 (1967); R. Gorman, Basic Text on Labor Law 30 (1976). The determination of "independence", however, ultimately depends upon an assessment of "all of the incidents of the relationship ... with no one factor being decisive." NLRB v. United Ins. Co., 390 U.S. at 258, 88 S.Ct. at 991; see Restatement (Second) of Agency § 220 (1957). Our task on review is to ascertain whether the Board's evaluation of such factors is "supported by substantial evidence when viewed in light of the entire record, including the evidence opposed to the Board's position." Seven-Up Bottling Co. v. NLRB, 506 F.2d at 600. So long as the Board's position represents a "choice between two fairly conflicting views," it should be enforced even if this court "would justifiably have made a different choice had the matter been before it de novo." Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951), quoted in NLRB v. United Ins. Co., 390 U.S. at 260, 88 S.Ct. at 991.

We shall first examine the status of the owner-operators immediately prior to the August 9 changes in their working conditions. As in all but the rarest of cases, there are pertinent factors that cut in both directions. The drivers' ownership of their respective vehicles and the financial obligations attending such arrangement are of course suggestive of independent contractor status; they show that the drivers have invested capital as well as labor in their enterprise, and that they have more than their labor skills alone to sell to others who might hire them. Each...