National Labor Relations Board v. A. Duie Pyle, Inc.

*389 A. LEON HIGGINBOTHAM, Jr., Circuit Judge,

dissenting.

The determination, in any one case, of whether a worker is an employee or an independent contractor is often a difficult and perplexing one. This issue in general, and with respect to the trucking context in particular, has been addressed in numerous cases by the National Labor Relations Board (the Board), the Courts of Appeals and by the Supreme Court. These cases reveal that, although a large array of factors enter into the decisionmaking process, no bright lines demarcate the employee from the independent contractor. “[T]here is no shorthand formula or magic phrase that can be applied to find the answer.” N.L.R.B. v. United Insurance Co. of America, 390 U.S. 254, 258 , 88 S.Ct. 988, 991 , 19 L.Ed.2d 1083 (1968). Thus, the resolution of this issue must be accomplished on a case-by-case basis. As a result, different conclusions are bound to be made on the basis of often similar facts. As with many other equally difficult questions in the field of labor law, Congress has entrusted the Board with the primary obligation of applying the law to the facts of specific cases. A reviewing court must uphold the Board’s determination if supported by substantial evidence upon considering the record as a whole. Id. Where there are two “fairly conflicting views,” a court must defer to the Board even if the court would be inclined to adopt the opposite view. Id. That the Board has no special expertise in applying the agency principles that control the determination here does not alter this standard of review or lessen the deference that a court must pay to the Board’s judgment. In fact, it is in contexts such as this, where the Board hears the evidence and sifts the facts and where the individual and often unique facts of each case are so crucial, that deference to the Board’s determinations, if supported by substantial evidence, is most crucial to a proper functioning of the administrative process that Congress has created.

I would agree that the view that the owner-operators here are independent contractors is a fairly supportable one, but I would insist that the view adopted by the Board is also a fair application of the relevant law to the facts of this case and that its view is supported by more than substantial evidence. Therefore, I would enforce the Board’s order and I, accordingly, dissent from the majority’s denial of the application for enforcement.

Both parties agree that common law agency principles and, more specifically, the “right of control” test, are to be applied in making the determination of whether a worker is an employee or independent contractor. This is the test that the Board applied. Thus, the question is whether there is substantial evidence supporting the finding that A. Duie Pyle, Inc. (Pyle) exercised sufficient control over its owner-operators to establish an employer-employee relationship.

In analyzing the various types of control exercised by the owner-operators, it is useful to distinguish between those forms of control required by law and those forms of control that Pyle exercises by its own choice. The interstate trucking industry is subject to extensive regulation both by the Department of Transportation and the Interstate Commerce Commission. Pursuant to such regulations, Pyle is responsible for the “exclusive possession, control, and use” of the trucking equipment it leases from the owner-operators. Pyle must provide public liability and property damage insurance covering the equipment while it is being operated on the company’s behalf. Drivers must file an application for employment and pass a physical examination, a road test and a written test before they can drive. Pyle must maintain these records as well as each operator’s driving record. In addition, Pyle must inspect and maintain all its vehicles and keep records of such maintenance. As a result Pyle employs a safety inspector and requires vehicles to be inspected prior to leasing and every thirty days thereafter. On at least one occasion Pyle’s safety inspector refused to allow an owner-operator to haul his load until repairs were made. The owner-operators must also place Pyle decals on their trucks to indicate the lease relationship.

*390 Pyle argues that, since the above forms of control are mandated by law and are thereby involuntary, they should not be considered significant. This court, however, has already held to the contrary. In Steel City Transport, Inc. v. N.L.R.B., 389 F.2d 735, 738-39 (3d Cir. 1968), we stated:

Petitioner contends that many of the factors relied upon as showing its right of control were based on requirements of the Interstate Commerce Commission’s regulations. Certainly this is so as to several such factors, but we think they were a relevant part of the totality of circumstances from which the “employee” determination was properly made. They were by no means “artificial” factors. Rather they had direct and important consequences on the safety and efficiency of the petitioner’s operation.

The Board does not, however, rely solely on the forms of control required by law. Although Pyle purported to place no restrictions, other than those necessary to comply with government regulations, on who would drive the trucks it leased, the record reveals that, in one instance, an owner of a truck was told that Pyle would not lease his truck if he used the driver he intended to use. That driver was characterized as a “troublemaker.” Although Pyle argues that the record does not establish that this driver was otherwise “qualified,” the record does show that the owner of the truck stated that he was qualified and that Pyle’s rejection was not based on a lack of qualifications.

Furthermore, although Pyle insists that drivers have an unconditional right to refuse loads without penalty, on at least one occasion, Pyle’s dispatcher refused to load a driver who had shortly before refused a load. Pyle replies that this was merely the result of a misunderstanding on the part of the dispatcher who thought that the driver’s refusal was calculated to deprive the dispatcher of the opportunity to ship that particular load thereby depriving the dispatcher of his commission. In addition, Pyle characterizes this disagreement, as well as the refusal to lease the truck driven by the allegedly troublemaking driver as isolated ones and contends that, as a matter of normal procedure, it makes no attempt to discipline its drivers.

The point, however, is that Pyle has reserved the right to both refuse to lease trucks driven by drivers of whom it disapproves and to discipline the drivers of trucks it has leased. That Pyle has not often found it necessary to exercise such powers is beside the point. Good professional truckers, like good children, may seldom need disciplining, but this does not mean that trucking companies and parents do not exercise control over them as a result of the threat of such discipline. “Under the control test, the right of control, even if unexercised, is the crucial element.” N.L.R.B. v. Deaton, 502 F.2d 1221, 1227 (5th Cir. 1974), cert. denied., 422 U.S. 1047 , 95 S.Ct. 2665 , 45 L.Ed.2d 700 (1975). The two incidents just described clearly show that Pyle has retained the “right of control” over its drivers’ conduct. An employer’s retention of the right to discipline its workers is a significant indicium of an employer-employee relationship. See, e. g., Aetna Freight Lines, Inc. v. N.L.R.B., 520 F.2d 928 (6th Cir. 1975), cert. denied, 424 U.S. 910 , 96 S.Ct. 1105 , 47 L.Ed.2d 314 (1976).

Pyle also exercises control beyond that required by law in several other respects. Although drivers are generally free to trip-lease, the company has placed some restrictions on trip-leasing. Pyle, in order to avoid increasing its own liability, has issued a notice forbidding its drivers from signing trip-lease contracts containing “hold harmless” clauses, which remove any risk of loss or damage caused by the owner-operator from the other carrier. Although the record does not reveal any action by Pyle to enforce this policy, the critical point remains that it has asserted its “right of control” over yet another aspect of its drivers’ conduct. Also, at Pyle’s Buffalo terminal, another restriction is imposed on drivers. If drivers want to carry a return load of Pyle’s, they must wait for twenty-four hours if there are less than three trucks awaiting shipment. Pyle, not its drivers, decides whether to bill customers for excessive time spent awaiting a load or for trucks that are ordered but not used. It also handles complaints concerning its driv *391 ers such as claims for damaged cargo. Drivers buy their bobtail insurance, which covers drivers’ liability when their equipment is not being used by the company, through Pyle. Pyle also makes cash advances to the drivers of up to seventy-five dollars per load.

Thus, this record reveals that Pyle exercises significant control over its drivers and their equipment pursuant to Federal regulation. In addition, Pyle has both retained and exercised the right to control the conduct of its drivers both through the refusal to hire and through the imposition of disciplinary measures. Pyle also exercises control over its drivers in a number of other ways, such as its restrictions on trip-leasing.

With this abundance of record support for the Board’s finding, it is difficult for me to perceive how it can be said that the Board has not chosen between two “fairly conflicting views” and that the Board’s view is not supported by substantial evidence. I realize that it is tempting for judges to substitute their views for those of the Board, especially where the application of common law principles is involved, but, on this record, I believe the proper exercise of the judicial role would be to defer to the Board’s amply supported conclusion and grant its application for enforcement.