Court Opinion

ID: 8886683
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:02:18.650288+00
Date Added: 2024-06-11T17:06:57.279469
License: Public Domain

MacKINNON, Circuit Judge
(dissenting) :
I agree with the majority’s conclusion that N.L.R.B. v. United Insurance Co., 390 U.S. 254, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968), contains the general principles which must control our disposition of this case. Thus I agree that we “should apply the common-law agency test” in determining whether the AIOO petitioners are employees or independent contractors. Id. at 256, 88 S.Ct. at 990. See Deaton Truck Lines, Inc., 143 NLRB 1372, 1375 (1963), app. dismissed, 337 F.2d 697 (5th Cir. 1964), cert, denied, 381 U.S. 903, 85 S.Ct. 1448, 14 L.Ed.2d 285 (1965). Furthermore, I agree that if we were presented with “two fairly conflicting views,” the Board’s resolu*1330tion of the issue would control. Id. at 260, 88 S.Ct. 988. With all respect to my brethren, however, I cannot agree that there exist two such views about the status of the AIOO petitioners.
“In such a situation as this there is no shorthand formula or magic phrase that can be applied to find the answer, but all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.” Id. at 258, 88 S.Ct. at 991. However, even if we were to review the Board’s decision through a somewhat mechanical application of the ten indicia contained in Restatement (Second) of Agency § 220 (hereinafter “Restatement”), it seems to me that we would have to conclude that the record in this case does not contain substantial evidence to support the conclusion that the owner-operators were “employees.”
To be sure, the nature of the truck services furnished provided the general contractors in these cases with considerable control over some of the details of the operations performed by the AIOO drivers. The Board so found and held, in my opinion correctly, that the existence of this right to control the operators in the performance of their assigned tasks was one factor which apparently pointed toward their status as employees.1 Restatement § 220(2) (a). In addition, though the Board did not specifically so find, the record supports the conclusion that the general contractors were in business and that the work performed by the owner-operators constituted a part of that business. Both of these factors point toward employee status. Restatement § 220(2) (j) and (h). Finally, it can perhaps be assumed that the general work performed by the instant owner-operators was normally done under some “supervision” of the contractors for whom such services were being rendered. While this factor has some features that might be indicative of employee status, Restatement § 220 (2) (c), it is equivocal because the type and extent of supervision and not supervision per se have a strong bearing on the category into which the operators are to be placed.
I believe, therefore, that there is substantial evidence in the record to support three of the ten relevant factors, and possibly a fourth, which point toward employee status. The remainder, in my view, point toward the status of independent contractor. Though the record is equivocal and the Board made no explicit findings on the issue, it seems to me that the evidence indicates that the work in which the truck owners engaged constituted a distinct occupation in California. Restatement § 220(2) (b). Indeed, so widespread was the practice of utilizing separately owned, owner-operated heavy earth-moving equipment on construction jobs, that a highly organized system of independent brokerage had arisen and the California Public Utilities Commission had undertaken to regulate many incidents of such activities. Moreover, operation of the equipment required a high degree of skill. Restatement § 220(2) (d). Some of the instant operators owned ten-wheel, ten-yard dump trucks and others owned large cement trucks. Operation of such vehicles, on a construction site or highway, is not a task for the untrained or unskilled. The owner-operators supplied the “in-strumentalities” of their own work, Restatement § 220(2) (e), namely, their highly specialized trucks. These trucks were purchased according to the owners’ individual preferences and cost up to $20,000.00 each. The work for any one construction company was sporadic and temporary, with independent job mobility being the general rule regarding the owner-operators. Restatement § 220(2) (f). It is true that the operators were paid by the hour, and this factor is one which would normally point toward em*1331ployee status. Restatement § 220(2) (g). However, the force of this point is blunted when one considers that (1) the California Public Utilities Commission set minimum hourly rates for the trucks and that these minimum rates were often the ones actually paid; (2) the truck operators frequently kept their own time records which were approved by the on-site construction foreman and then sent by the operator to the broker who used them in billing the construction company; (3) the hourly rate paid the operators was not simply “wages” but a combined hourly payment for truck and man, out of which the owner was required to pay the driver and the expenses of operating the truck which included gasoline, oil, tires, depreciation, license fees, maintenance, repairs, insurance, etc. Compare, Associated Independent Owner-Operators, Inc. v. N.L.R.B., 407 F.2d 1383, 1386 (9th Cir. 1969). Finally, the parties themselves did not, in my view, believe that they were creating the relationship of employer and employee. Restatement § 220(2) (i). The one contract between a construction company and a broker introduced in evidence — a contract styled an “Equipment Rental Agreement” — , pursuant to which the instant AIOO petitioners were engaged, contained the following clause:
The Lessor [broker] is an independent contractor and all persons employed by Lessor in connection herewith shall be his employees and not employees of the Contractor [construction company] in any respect whatsoever.
Moreover, the construction companies and the owner-operators acted as if they did not believe that they were in the relationship of employer and employee. Each operator was required to, and did, carry his own liability insurance. Each paid his own property taxes. Each paid his own maintenance costs. Each was free to hire substitutes to perform the work required to operate the construction equipment he had rented. (This removed the personal element so frequent in a true employment relationship.) None had deductions for income taxes and Social Security removed by the construction company from the amounts due him for the services he had performed.
In sum, there are six factors which point toward the status of the owner-operators as independent contractors and only three which clearly point toward their status as employees. Were “score” determinative, I would be forced to declare the owner-operators independent contractors, 6-3.
Score is not, of course, determinative, and the sum of individual criteria does not determine a “winner.” Like my brethren, then, I decline to rest my views entirely on the analysis just undertaken. Clearly some of the above factors are more important than are others for resolution of the problem before us. Which factors these are is revealed by an examination of the purposes for which the Restatement test was formulated.
Comment (c) to Restatement § 220 states:
The relation of master and servant is one not capable of exact definition. -It is an important relation in that upon it depends the liability of the master to third persons and to his employees under the provisions of various statutes as well as under the common law. * * *
Following the same theme, Comment (a) states:
The word [“servant”] indicates the closeness of the relation between the one giving and the one receiving the service rather than the nature of the service or the importance of the one giving it. * * * The rules for determining the liability of the employer for the conduct of both superior servants and the humblest servants are the same; the application differs with the nature and extent of their duties.
The thrust of these comments is given added force when one views the Restatement (Second) of Agency as a whole, for such a view reveals that the Institute has attempted primarily to determine and enunciate the rules governing liability of an employer for injuries to and by *1332his employees. In attempting to set guidelines for such liability, it is clearly rational to place heavy, and perhaps the heaviest, emphasis on the amount of control which the employer has a right to exert over the details of another person’s actual performance of a given task. The more control he has a right to exert, the more one would be inclined to hold him responsible, under traditional theory, for injuries which his employee’s performance of that task engendered.2
The conclusion that the instant operators would be employees under one application of § 220 if the question were whether the construction company would be liable to a person crushed beneath one of the trucks does not, however, mandate a conclusion that they would also be employees for purposes of the National Labor Relations Act.3 True it is that Congress evinced an “intent” to have the employer-employee relationship determined by general agency principles when it amended the Act in 1947. N.L.R.B. v. United Insurance Co., 390 U.S. 254, 256 & n. 2, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968). Even under general principles, however, the determination of employee status is a functional one, and the same person is not necessarily an employee for any and all purposes. See generally Restatement §§ 228-249.
Just as heavy stress must rightly be placed on one person’s right to control the actual performance of the specific incident out of which an injury arises when the question concerns the liability of the employer, heavy stress must be placed on the control embodied in the entire relationship when the question is whether an individual is an employee for purposes of the National Labor Relations Act. The pervasive, unilateral control exerted by employers over all aspects of the employer-employee relationship — and even over the lives of the employees — as well as the attempts to repress all concerted effort to balance the scales, were two prime forces among those which generated the Act. These forces cannot be ignored in determining the incidents of control which bring individuals within the reach of its protection.4 In my view, then, one must look to the control embodied in the entire relationship, and not simply that embodied in directing performance of a given task, to determine who are employees for purposes of the National Labor Relations Act.5
The Board itself has recognized and applied the above distinction. In practical terms, it means essentially this:
Where the person for whom the services are performed retains the right to control the manner and means by which the result is to be accomplished, the relationship is one of employment. On the other hand, where the control is reserved only as to the result sought, the relationship is that of an independent contractor. The resolution of this determination depends on the facts of each case. * * *
*1333A. Paladini, Inc., 168 NLRB 952 (1967) (emphasis supplied). In the instant case, it appears that the general contractors merely exercised control over the results which they desired. Although the type of operations involved necessitated the exertion of more specific authority than might be present in other more simple types of independent contractor relationships — yet far less than that which would be normally expected in a relationship as complex as that involving the erection of a building by an independent contractor — I believe that the amount of power invested in the contractors was not sufficient to indicate the existence of an employment relationship. They did not possess the authority to control the “manner and means” by which each job was to be performed within the meaning of Paladini. See 168 NLRB at 953. They did not dictate the specific types of trucks which the owner-operators had to utilize, nor did they exercise extensive supervision over every phase of the operations. See Deaton Truck Lines, Inc., supra, 143 NLRB at 1375-1376. They merely exercised that amount of authority which was basically necessary to insure the accomplishment of the specific jobs contracted for. This control factor is clearly part of every independent contractor relationship, and the Board and courts must be careful to distinguish such minimal control from the extensive authority which accompanies a true employment relationship.
When examining Restatement § 220 with the preceding analysis in mind, several factors therein listed assume a dominant importance. Among these is the length of time it is intended that the person will be engaged. Restatement § 220(2) (f). Here the relationships were not intended to be ongoing ones. Owner-operators were engaged by the job only, and each such job might last only a few days or a few months. A long and continual dependence on the ability of a given general contractor to locate sufficient work to enable it to provide an owner-operator with a livelihood was not envisioned by the parties. Of equal importance is the fact that the owner-operators themselves supplied the expensive and complex machinery which enabled them to engage in their independent businesses and permitted them to move freely from job to job. Restatement § 220(2) (e). Their own ability to raise capital and maintain credit, and not that of the construction companies, was the primary factor which determined whether they would be able to maintain themselves and their families. They had to bear the financial risks involved regarding their equipment. Compare A. Pala-dini, Inc., supra, 168 NLRB at 952-953. Moreover, the skill which they themselves had acquired in one way or another determined whether they could be licensed to operate their vehicles. Restatement § 220(2) (d). The owner-operators are not individuals whose acquisition of relevant skills depended upon exposure to machinery, personnel and jobs provided by.a specific general contractor. Finally, the parties clearly did not believe that they were creating an employer-employee relationship. The construction companies were primarily interested in the trucks possessed by the owners, as the rental agreements make clear. Whether these operators worked was thus controlled not so much by whether the construction companies needed men, as by whether they needed the equipment which the operators owned. Furthermore, if the truck ran out of gas, and the owner did not fill the tank, he did not work. If it broke down, and the owner did not have it repaired, he did not work. If the taxes on the truck were not paid, and the owner did not pay them, he did not work. If the owner did not obtain the requisite insurance, he would not be engaged by the construction companies. All this was by agreement of the parties.
In sum, I do not find in this record substantial evidence that the significant aspects of control required for purposes of the Act’s coverage were possessed by the construction companies. Believing as .1 do that the truly relevant incidents of control must be found in those areas of the relationship beyond the simple direc*1334tion of work involved here, before N.L.R. A. coverage is imposed, I am forced to conclude that the parties were independent contractors. I therefore respectfully dissent.

. But see discussion, infra, concerning the difficulties encountered when one attempts to apply the “agency” right of control liability test in a mechanical fasliion where the question is whether an individual is or is not an “employee” under the N.L.R.A.

. See generally W. Prosser, Handbook of the Law of Torts, cli. 13 (3rd ed. 1964) ; W. Seavy, Handbook of the Law of Agency, §§ 1-3 (1964).

. I do not, of course, venture any opinion whatsoever concerning the liability of the general contractors for injuries caused by the owner-operators.

. Indeed, the entire thrust of the Act is the bringing together of employee and employer so that disputes may be resolved in an amicable fashion. The agreements which result from such resolutions are “an effort to erect a system of industrial self-government. * * * The mature labor agreement may attempt to regulate all aspects of the complicated relationship, from the most crucial to the most minute over an extended period of time.” United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 580, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). The scope of the Act, therefore, must be determined in light of the fact that control over performance of work is only one facet of the relationship with which the Act and its intended products deal.

. This analysis does not depart from that utilized by the Supreme Court in N.L.R.B. v. United Ins. Co., 390 U.S. 254, 258-259, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968). Most of the “decisive” factors therein discussed were factors other than control by the employer of the details of work performed by the employee in question.