Corp Exprs Delivery v. NLRB

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.

 Richard A. Cohen, Senior Attorney, National Labor Rela-
tions 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. Arm-
strong, Deputy Associate General Counsel, and Fred L. Corn-
nell, 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 peti-
tions 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 commit-
ted unfair labor practices against owner-operators who were
engaged in union organizing activities. Corp. Express Deliv-
ery 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 applica-
tion 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 own-
er-operators held a meeting to discuss forming a union. Soon
thereafter two company managers told certain owner-
operators 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

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 moni-
toring 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 exer-
cise 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 contrac-
tor. 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 pri-

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 deter-
mines 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 Ex-
press 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 serv-
ing 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 employ-
er'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 Compa-
ny, and were described in their contracts as "independent contrac-
tors." At the same time, the drivers had no real entrepreneurial
opportunities and were paid by the day, not by the project.

"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 enjoy-
ing substantial control over the manner in which he does his
job. Conversely, a lawn-care provider who periodically ser-
vices each of several sites is an independent contractor re-
gardless 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 owner-
operators 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 func-
tioned 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 contrac-

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 "em-
phasized the owner-operators['] control over their work be-
cause 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 owner-
operators due to their participation in union organizing activi-
ties 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 Kenne-
dy 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 [owner-
operator] Dunn that his name had come up," thereby reveal-
ing 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 prac-
tices by monitoring, threatening, and firing employees for
their efforts to organize a union.

 III. Conclusion

For the foregoing reasons, the Company's petition for
review is denied and the Board's cross-application for en-
forcement is granted.

So ordered.