Opinion ID: 387504
Heading Depth: 1
Heading Rank: 2

Heading: Trustee's Appeal

Text: 6 The district court found that owner-operators dispatched by Northwest to general contractors were not Northwest's employees but rather were independent contractors. The parties agree that independent contractors, as such, are excluded from the scope of the MLA by virtue of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5), authorizing employer contributions to trust funds solely on behalf of employees. The district court also found that although the MLA requires the Contractor to put owner-operators on its payroll as of the second day of work, the term Contractor refers to general contractors, not to Northwest acting as a broker. The Trustees argue that these two findings are clearly erroneous. 7 In distinguishing an employee from an independent contractor, courts apply common law principles of agency to the factual context of each case. NLRB v. United Insurance Co. of America, 390 U.S. 254, 256, 88 S.Ct. 988, 989, 19 L.Ed.2d 1083 (1968). 1 In addressing the issue, this court considers certain factors set forth in the Restatement (Second) of Agency § 220(2): 8 (a) the extent of control which, by the agreement, the master can exercise over the details of the work; 9 (b) whether or not the one employed is engaged in a distinct occupation or business; 10 (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; 11 (d) the skill required in the particular operation; 12 (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; 13 (f) the length of time for which the person is employed; 14 (g) the method of payment, whether by the time or by the job; 15 (h) whether or not the work is a part of the regular business of the employer; 16 (i) whether or not the parties believe they are creating the relation of master and servant; and 17 (j) whether the principal is or is not in business. 18 Brown v. NLRB, 462 F.2d 699, 705 n. 10 (9th Cir.), cert. denied, 409 U.S. 1008, 93 S.Ct. 441, 34 L.Ed.2d 301 (1972). Specifically, this court has stated that the common law agency test rests primarily on the amount of supervision that the putative employer has a right to exercise over the individual, particularly regarding the details of the work. Associated Independent Owner-Operators, Inc. v. NLRB, 407 F.2d 1383, 1385 (9th Cir. 1969); SIDA of Hawaii, Inc. v. NLRB, 512 F.2d 354, 357 (9th Cir. 1975). This factor, however, must be tempered by other considerations relevant to the relationship in its entirety. Associated General Contractors of California, Inc. v. NLRB, 564 F.2d 271, 279 (9th Cir. 1977); Merchants Home Delivery Service, Inc. v. NLRB, 580 F.2d 966, 973 (9th Cir. 1978) (Other factors which this court has considered are the entrepreneurial aspects of the individual's business; risk of loss and opportunity for profit; and the individual's proprietary interest in his business.). 19 The district court correctly concluded that the owner-operators were independent contractors and not employees of Northwest. Each owner-operator dispatched by Northwest was not required to accept the offered construction work. Each was also free to render similar services to other contractors. Each owner-operator set his equipment rental rate with Northwest, but was free to renegotiate the rate with the general contractor if the work proved more difficult or extensive than anticipated. Each was supervised, if at all, by the general contractor, not by Northwest, as to the hours, the extent, and the performance of his work. Northwest's only involvement in the employment relationship was to provide timecards to record the hours worked. The timecards were returned by the owner-operators to Northwest who then billed the general contractor for the services rendered. The rate billed was an hourly rate combining the equipment usage fee with the charge for the operator's labor. The entire payment less a seven percent brokerage commission was remitted by Northwest to the owner-operator. Since Northwest may exercise little, if any, supervision over the owner-operators or their equipment, but merely participated in the employment relationship between the general contractor and the owner-operators by negotiating the initial rate for the equipment and the operator, the district court correctly concluded that the owner-operators were independent contractors and not Northwest's employees. 20 Notwithstanding the district court's conclusion, the Trustees argue that the MLA required that owner-operators eventually become Northwest's employees even though they began their jobsite work as independent contractors. The relevant provisions of the MLA provide: 21 The Owner-Operator shall become a bona fide employee of the Contractor as defined in the Agreement upon reporting for work on the second consecutive working day; such employee status to be effective from the first hour of work performed on the preceding working day. 22 The term CONTRACTOR (or EMPLOYER) shall refer to a person, firm or corporation, party to this AGREEMENT. 23 The Trustees argue that Contractor refers to Northwest as a signatory of the MLA and requires Northwest to place owner-operators on its payroll. Northwest, on the other hand, asserts that the MLA requires the general contractors for whom owner-operators work to include them on the general contractors' payrolls. The district court found that the MLA requires that general contractors, not Northwest acting as a broker, treat owner-operators as employees and therefore pay the appropriate trust fund contributions. 24 The construction of a contractual provision is a question of law subject to our de novo review. Transport Indemnity Co. v. Liberty Mutual Insurance Co., 620 F.2d 1368, 1370 (9th Cir. 1980); Republic Pictures v. Rogers, 213 F.2d 662 (9th Cir.), cert. denied, 348 U.S. 858, 75 S.Ct. 83, 99 L.Ed. 676 (1954). After reviewing the record, we find the district court's interpretation of the MLA to be reasonable and correct.