National Van Lines, Inc. v. NLRB

• Decision Date: 05 January 1960
• Docket Number: No. 12657.,12657.
• Citation: 273 F.2d 402
• Parties: NATIONAL VAN LINES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

273 F.2d 402 (1960)

NATIONAL VAN LINES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 12657.

United States Court of Appeals Seventh Circuit.

January 5, 1960.

Walter P. Loomis, Jr., Henry E. Seyfarth, Owen Fairweather, Chicago, Ill. (Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., of counsel), for petitioner.

Thomas J. McDermott, Assoc. Gen. Counsel, Marion L. Griffin, Stuart Rothman, Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Frederick U. Reel, Washington, D. C., for National Labor Relations Board.

Before HASTINGS, Chief Judge, DUFFY, Circuit Judge, and GRUBB, District Judge.

HASTINGS, Chief Judge.

This is a petition by National Van Lines, Inc. (National) to review and set aside an order issued by the National Labor Relations Board (Labor Board) under Section 10(f) of the Labor Management Relations Act, 1947, as amended, 61 Stat. 136, 29 U.S.C.A. § 141 et seq. (the Act). The Labor Board filed a cross-petition requesting enforcement of such order.

On May 16, 1956, Van & Storage Drivers Local Union No. 389, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Union) filed a petition with the Labor Board seeking certification as collective bargaining agent for National's "lease and owner-operators" (contract-drivers). After a hearing, the Labor Board issued its Decision and Direction of Election on April 16, 1957, finding, inter alia, that the contract-drivers in question were employees of National within the meaning of Section 2(3) of the Act, 29 U.S.C.A. § 152(3), and that they were not independent contractors. It directed an election among such persons. Following denial of a motion for reconsideration of this decision, the Union won the mail ballot election conducted in May, June and July, 1957 by a vote of 26 to 25. Six ballots were challenged by the Labor Board agent in charge of the election because they were not received by the time specified in the notice of election, although they were received prior to the time established by the notice of election for opening and counting the ballots. Subsequently, the challenges were sustained by the Labor Board; on June 6, 1958 it issued its final order of certification favorable to the Union. (Reported at 117 NLRB 1213 (1957) and 120 NLRB 1343 (1958) )

Based on a charge of refusal to bargain filed by the Union on November 19, 1958, the Labor Board issued its Decision and Order on May 25, 1959, finding that National violated Section 8(a) (5) and (1) of the Act by its admitted refusal to bargain with the certified representative of its contract-drivers. It directed National to cease and desist from (1) refusing to bargain with the Union and (2) interfering with, restraining or coercing its employees in the exercise of rights guaranteed by the Act. It further ordered National to take certain affirmative action which the Labor Board found would effectuate the Act. (Reported at 123 NLRB No. 157 (1959) )

Errors relied upon by National arise out of the determination that the contract-drivers were employees under Section 2(3) of the Act, not independent contractors; the refusal to count the six challenged ballots which could have affected the outcome of the election; and the making of certain findings of fact by the Labor Board which have no legal support in the record.

National is a corporation with its principal office in Illinois, near Chicago, and regional offices in New York City, Washington, D. C., Atlanta, Georgia, Dallas, Texas, Los Angeles and San Francisco, California, and Seattle, Washington. It is a common carrier by motor vehicle engaged in local and long distance transportation of household goods and similar commodities throughout the United States. All its operations are under the authority of a certificate of convenience and necessity issued by the Interstate Commerce Commission.

The critical question before us is whether, under the facts of this case, the contract-drivers were employees or independent contractors. The Labor Board and the Company are in full accord that this question of status is to be determined by common law tests.

Section 2(3) of the Act, as amended in 1947, provides in relevant part that "the term `employee' shall include any employee, * * * but shall not include * * * any individual having the status of an independent contractor * * *." Prior to the 1947 amendments, this definition did not expressly exclude independent contractors. See 49 Stat. 450. The Act does not define the term "employee." "However the legislative history of the Taft-Hartley Law, which was adopted in 1947 as an amendment to the National Labor Relations Act, shows quite clearly that when Congress passed the Labor Act it intended the word `employee' to mean someone who works for another for hire and this clear expression of Congressional intent we are obligated to follow." National Labor Relations Board v. Steinberg, 5 Cir., 1950, 182 F.2d 850, at pages 854-855.¹

Prior to the 1947 amendments, the Supreme Court, in United States v. Silk, 1947, 331 U.S. 704, 67 S.Ct. 1463, 91 L.Ed. 1757,² affirmed this court's holding in Greyvan Lines v. Harrison, 7 Cir., 1946, 156 F.2d 412, that the contract-drivers in that case were independent contractors and not employees. The case involved a suit to recover employment taxes collected from an employer under the Social Security Act, 42 U.S.C.A. § 401, et seq. There the Supreme Court said:

"* * * Where the arrangements leave the driver-owners so much responsibility for investment and management as here, they must be held to be independent contractors. These driver-owners are small businessmen. They own their own trucks. They hire their own helpers. In one instance they haul for a single business, in the other for any customer. The distinction, though important, is not controlling. It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound management, that marks these driver-owners as independent contractors." (Emphasis added.) 331 U.S. at page 719, 67 S.Ct. at page 1471, 91 L.Ed. 1757.

In the instant case, both parties cite our holding in National Labor Relations Board v. Phoenix Mut. L. Ins. Co., 7 Cir., 1948, 167 F.2d 983, 986, 6 A.L.R.2d 408, as authority for the proposition that we must follow the Congressional mandate in the 1947 amendments of the Act. Since both parties rely upon the rule and tests outlined by Judge Duffy in that opinion as being applicable standards in determining the status of an individual under the Act, we set them out at some length:

"A similar question was considered by this court in Williams v. United States, 7 Cir., 126 F.2d 129, 132, certiorari denied, 317 U.S. 655, 63 S.Ct. 52, 87 L.Ed. 527, where the rule was stated that each case must depend upon its own facts, and that the test most usually employed for determining the distinction between an independent contractor and an employee is found in the nature and the amount of control reserved by the person for whom the work is done. This court there pointed out that the employer-employee relationship exists when the person for whom the work is done has the right to control and direct the work, not only as to the result accomplished by the work, but also as to the details and means by which that result is accomplished, and that it is the right and not the exercise of control which is the determining element. A number of tests were pointed out, such as 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 working 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 to the tests there mentioned, 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 the place where the work is to be performed." Id. 167 F.2d at page 986.

See also, National Labor Relations Board v. Steinberg, supra, and National Labor Relations Board v. Nu-Car Carriers, 3 Cir., 1951, 189 F.2d 756. Cf. United States v. Mutual Trucking Co., 6 Cir., 1944, 141 F.2d 655.

In its operations National utilizes three classifications of drivers: employee-drivers, agents' drivers and contract-drivers. In this appeal we are concerned solely with contract-drivers. However, in order to have a picture of the "total situation," we shall briefly describe the other two categories.

Employee-drivers are either local or long distance drivers. National employs from 20 to 25 local drivers at its regional offices to make local pickups and deliveries, to transport household goods to warehouses for storage prior to long distance movement, and to perform some local moving jobs. Three long distance drivers operate company-owned equipment to transport household goods throughout the United States, as directed by National. These employee-drivers are paid wages and receive the same fringe benefits as other employees, including paid vacations, unemployment compensation, paid holidays and sick leave, and group insurance. National also makes social security contributions for them and withholds federal income tax deductions from their wages. These drivers wear the company uniform while working. The three long distance...