Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-01058/USCOURTS-caDC-01-01058-0/pdf.json

Parties Involved:
Corporate Express Delivery Systems
Petitioner
International Brotherhood of Teamsters, Local Union No. 886
Intervenor
National Labor Relations Board
Respondent

Document Text:

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 1, 2002 Decided June 11, 2002

No. 01-1058

Corporate Express Delivery Systems,

Petitioner

v.

National Labor Relations Board,

Respondent

International Brotherhood of Teamsters,

Local Union No. 886,

Intervenor

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Terry L. Potter argued the cause and filed the briefs for

petitioner.

USCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 1 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Richard A. Cohen, Senior Attorney, National Labor Relations Board, argued the cause for respondent. With him on

the brief were Arthur F. Rosenfeld, General Counsel, John

H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Fred L. Cornnell, Supervisory Attorney.

James B. Coppess argued the cause for intervenor. With

him on the brief was Michael C. Murphy.

Before: Ginsburg, Chief Judge, and Edwards and

Sentelle, Circuit Judges.

Opinion for the Court filed by Chief Judge Ginsburg.

Ginsburg, Chief Judge: An express delivery company petitions for review, and the National Labor Relations Board

cross-applies for enforcement, of a Board order holding that

(1) drivers who delivered packages for the Company using

their own vehicles (owner-operators) were employees rather

than independent contractors, and (2) the Company committed unfair labor practices against owner-operators who were

engaged in union organizing activities. Corp. Express Delivery Sys., 332 N.L.R.B. No. 144, at 10-11 (Dec. 19, 2000).

Because we agree with the Board that the owner-operators

are employees, and there is substantial evidence that the

Company engaged in the practices alleged, we deny the

Company's petition for review and grant the Board's application for enforcement.

I. Background

The Board found the following facts, some of which the

Company contests. Corporate Express Delivery Systems

engaged two types of drivers to deliver packages in Oklahoma

City: those who drove company vehicles and those who

operated their own vehicles. In February, 1999 several owner-operators held a meeting to discuss forming a union. Soon

thereafter two company managers told certain owneroperators the Company would close its Oklahoma City branch

rather than deal with a union. A third manager then fired

three of the union organizers. When the owner-operators

USCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 2 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

held a second meeting, this manager drove twice around the

meeting hall in an apparent effort to learn who was attending.

The General Counsel of the Board charged Corporate

Express with violating s 8(a)(1) and (3) of the National Labor

Relations Act, 29 U.S.C. s 158(a)(1), (3), by threatening and

firing employees for engaging in union activity and by monitoring such activity. The Company argued principally that

its owner-operators were independent contractors and were

therefore not protected by the Act. An Administrative Law

Judge ruled that the owner-operators were employees and

that the Company had committed the charged unfair labor

practices. The Board adopted the order of the ALJ, and

Corporate Express petitioned this court for review.

II. Analysis

The NLRA prohibits an employer from interfering with its

employees' efforts to organize a union, but the Act offers no

such protection to "independent contractors," 29 U.S.C.

s 152(3); see North Am. Van Lines, Inc. v. NLRB, 869 F.2d

596, 597 (D.C. Cir. 1989) (NAVL). Where, as here, the Board

distinguishes an employee from an independent contractor,

this court neither reviews its decision de novo nor affords it

great deference. Drawing the distinction requires an exercise of judgment about both facts and law, but it "involve[s]

no special administrative expertise that a court does not

possess." C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 858 (D.C.

Cir. 1995). Accordingly, we take a middle course and "uphold

the Board if it can be said to have made a choice between two

fairly conflicting views." Id.; see also NAVL, 869 F.2d at

599.

In past cases we have treated "the amount of control that

the company has over the way in which the worker performs

his job" as the most important among several elements useful

in distinguishing an employee from an independent contractor. C.C. Eastern, 60 F.3d at 858; see also NAVL, 869 F.2d

at 599; Local 777, Democratic Union Org. Comm., Seafarers

Int'l Union, 603 F.2d 862, 873 (D.C. Cir. 1978). Thus, we

held in C.C. Eastern that owners of tractors used to haul a

cartage company's trailers were independent contractors priUSCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 3 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

marily because the company did not control the "means and

manner" of their work; the company did not concern itself

with the owner-operators' hours, attire, routes, break times,

type of vehicle, or vehicle maintenance. 60 F.3d at 858-59.

Although the Company argues that this case is just like

C.C. Eastern, we think the means and manner test might well

yield the opposite result. In the earlier case we emphasized

the drivers' freedom to "reload the freight and deliver it in

the order they find most efficient" and concluded that "it is

really the driver, not the Company, who ultimately determines the order in which he will make deliveries." Id. at 859.

In this case, by contrast, the owner-operators "could not

deviate from the order of stops set out on the route sheet."

Corp. Express, 332 N.L.R.B. No. 144, at 4. Corporate Express also required the owner-operators to carry pagers so

they could be reached at all times, and to call in frequently

for scheduling changes and updates. In addition, Corporate

Express--unlike C.C. Eastern--imposed a dress code upon

the drivers: "Owner operators were required to wear navy

pants and company shirts that were either navy or white or

striped." Id. On the other hand, the owner-operators serving Corporate Express were free to choose their routes,

break times, and the type of vehicle they drove, and were

responsible for the maintenance of their vehicle. Under the

means and manner test, therefore, the Board may well "have

made a choice between two fairly conflicting views" when it

held that the owner-operators were employees.*

Ultimately, however, we need not answer that question

because we uphold as reasonable the Board's decision, at the

urging of the General Counsel, to focus not upon the employer's control of the means and manner of the work but instead

upon whether the putative independent contractors have a

__________

* The factors to which we have previously looked other than

control of the means and manner of work, see C.C. Eastern, 60 F.3d

at 858-59, are also in conflict. The owner-operators owned their

own vehicles, received no life or health insurance from the Company, and were described in their contracts as "independent contractors." At the same time, the drivers had no real entrepreneurial

opportunities and were paid by the day, not by the project.

USCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 4 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

"significant entrepreneurial opportunity for gain or loss." Id.

at 6. We agree with the Board's suggestion that the latter

factor better captures the distinction between an employee

and an independent contractor. For example, as the Board

points out, "the full-time cook is regarded as a servant [rather

than as an independent contractor] although it is understood

that the employer will exercise no control over the cooking."

Restatement (Second) of Agency s 202(1) cmt. d (1957).

Similarly, a corporate executive is an employee despite enjoying substantial control over the manner in which he does his

job. Conversely, a lawn-care provider who periodically services each of several sites is an independent contractor regardless how closely his clients supervise and control his

work. The full-time cook and the executive are employees

and the lawn-care provider is an independent contractor not

because of the degree of supervision under which each labors

but because of the degree to which each functions as an

entrepreneur -- that is, takes economic risk and has the

corresponding opportunity to profit from working smarter,

not just harder.

A shift of emphasis to entrepreneurialism leads inexorably

to the conclusion that the Board properly deemed the owneroperators in this case employees. Typically an entrepreneur

not only supplies his own equipment or tools; he may also

hire subordinates and work for more than one party. The

Board found, however, that the owner-operators here were

not permitted to employ others to do the Company's work,

332 N.L.R.B. No. 144, at 4 ("Owner/operators could not hire

someone to drive their route"), or to use their own vehicles

for other jobs, id. at 6 ("[O]wner-operators may not use their

vehicles to deliver goods for anyone other than Respondent")

(emphasis in original). As a result, the owner-operators

lacked all entrepreneurial opportunity and consequently functioned as employees rather than as independent contractors.

Corporate Express contends that the Board's decision is

inconsistent with that of its Director for Region Six, who

found in another case that "owner-operators working [for this

Company] under a similar contract were independent contracUSCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 5 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

tors." See Corp. Express Delivery Sys., Case No.

6-RC-11788 (Apr. 27, 2000). But the contract in the Region

Six case was apparently dissimilar in a key respect: As the

Company itself acknowledges, the Region Six decision "emphasized the owner-operators['] control over their work because of their ability to set their own delivery schedule." As

discussed above, that factor cuts the opposite way in this case.

In any event, the decision of a Regional Director does not

bind the Board.

Finally, Corporate Express maintains that even if the

owner-operators were employees, it did not engage in any

unfair labor practices. This claim simply cannot be squared

with the record evidence in light of the credibility findings

made by the ALJ. The Company's main argument is that its

area manager, William Kennedy, could not have fired owneroperators due to their participation in union organizing activities because he was unaware of that participation when he

fired them. The ALJ, however, expressly did not credit

Kennedy's testimony to the extent it conflicted with other,

credited evidence; and two people whom the ALJ deemed

credible gave testimony that contradicted Kennedy's claim.

First, union organizer Eddie Landers testified that he had

faxed Kennedy a list of the organizers a week before Kennedy terminated two owner-operators whose names appeared at

the top of that list. Corp. Express, 332 N.L.R.B. No. 144, at

10. Second, the ALJ found that "Kennedy told [owneroperator] Dunn that his name had come up," thereby revealing that Kennedy and others in the Company "had discussed

employee support for the Union" before the terminations.

Id. The Company's other arguments regarding the unfair

labor practice charges similarly ignore the record evidence

upon which the ALJ relied. We therefore uphold the Board's

ruling that Corporate Express committed unfair labor practices by monitoring, threatening, and firing employees for

their efforts to organize a union.

USCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 6 of 7
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

III. Conclusion

For the foregoing reasons, the Company's petition for

review is denied and the Board's cross-application for enforcement is granted.

So ordered.

USCA Case #01-1058 Document #682853 Filed: 06/11/2002 Page 7 of 7