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03/03/89 North American Van Lines, v. National Labor

March 3, 1989

NORTH AMERICAN VAN LINES, INC., PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT 1989.CDC.75 DATE DECIDED: MARCH 3, 1989



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petition for Review of an Order of the National Labor Relations Board and Cross-Application for Enforcement.

APPELLATE PANEL:

Robinson, Starr and Buckley, Circuit Judges. Opinion for the Court filed by Circuit Judge Starr.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STARR

North American Van Lines, a company that transports goods by truck, petitions to review the determination of the National Labor Relations Board that the company committed an unfair labor practice through its role in creating and supporting an "Advisory Council," comprised of management officials and drivers who carry its loads. See 29 U.S.C. 158(a)(2) (1982) ("It shall be an unfair labor practice for an employer . . . to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it"). The Board cross-applies for enforcement of its order.

The Board's jurisdiction, and the scope of sections 8(a)(1) and 8(a)(2) of the National Labor Relations Act, extend only to an employer's acts directed at its "employees." The NLRB's jurisdiction does not encompass "independent contractor[s]." See id. § 152(3). The company claims that the drivers at issue are independent contractors rather than employees, and thus that the Labor Board's order should be set aside as exceeding the NLRB's jurisdiction. We agree. I

North American Van Lines engages in interstate trucking operations through several divisions. The Board's order was limited to drivers who carry loads for the company's Commercial Transport Division. NAVL solicits, bills, and otherwise works with the commercial clients who seek to ship goods. NAVL arranges for those loads to be hauled by calling upon the services of a pool of drivers, each of whom has some degree of equity interest in a truck cab and an ongoing and (for an indefinite period) nearly exclusive relationship of carrying loads for NAVL.

NAVL's efforts to match loads with available drivers create the intricate relationship between the company and the drivers that underlies the dispute in this case. NAVL personnel (specifically, "counselors" and dispatchers) use threats and promises of benefits to convince available drivers to carry contracted loads.* Additionally, the company engages in widespread efforts to maintain the pool of drivers who carry the loads. While the company attracts many experienced drivers who own their own trucks, it recruits, trains, and provides competitive financing (for the purchase of the truck cab) to the overwhelming number of drivers who haul for the Commercial Transport Division.

In the action that gave rise to this case, NAVL created an "Advisory Council," composed of management representatives and interested drivers selected by the company, to discuss the company's policies affecting the drivers. The company supported and shaped the operation of the council. Council members discussed issues and information that indisputably concerned working conditions; in addition, the council made suggestions to NAVL management concerning benefits and working conditions. The company accepted and acted upon many of those suggestions.

One driver, who had unsuccessfully sought to join the council, filed a charge alleging that the company's support of the council constituted an unfair labor practice. Following an extensive hearing, the Administrative Law Judge agreed. The ALJ found that the council was a labor organization and that NAVL, through its active involvement, had unlawfully interfered with the organization's formation and operation. ALJ Decision 26, J.A. at 27. The ALJ also concluded that the drivers were employees rather than independent contractors. Id. The NLRB summarily affirmed the ALJ's decision. North American Van Lines, Inc., 288 NLRB No. 11 at 1-3 (March 10, 1988), J.A. at 1-3.

NAVL petitions for review of the Board's decision, claiming that the drivers are independent contractors, not employees, and thus that the company-driver relationship lies outside the Board's jurisdiction. The NLRB cross-applies for enforcement. For the reasons that follow, we grant the petition and deny the cross-application. II

Governing precedent makes clear that the court is not "to extend any great amount of deference" to the Board's determination that workers are employees rather than independent contractors. Local 777, Democratic Union Org. Comm., Seafarers Int'l Union v. NLRB, 195 U.S. App. D.C. 280, 603 F.2d 862, 872 (D.C. Cir.), reh'g denied, 603 F.2d 891 (1978) (separate statement of decision). All parties agree (and the cases firmly establish) that Congress intended that traditional agency law principles guide the determination whether workers are employees (and thus fall within the Board's jurisdiction) or independent contractors (and thus are outside that jurisdiction). See, e.g., NLRB v. United Ins. Co., 390 U.S. 254, 256, 19 L. Ed. 2d 1083, 88 S. Ct. 988 (1968) ("The obvious purpose of this amendment [to NLRA § 2(3)] was to have the Board and the courts apply general agency principles in distinguishing between employees and independent contractors under the Act.").

"Such a determination of pure agency law involve[s] no special administrative expertise that a court does not possess." Id. at 260. Quite apart from the law, the Board's underlying findings of fact are essentially undisputed. As in the case that most directly guides us, "basically the issue . . . calls for applying general principles of the law of agency--the distinction between employees and independent contractors--to undisputed facts." Local 777, 603 F.2d at 872. Thus, "we need not accord the Board's decision that special credence which we normally show merely because it represents the agency's considered judgment." Id.

The distinction between employees and independent contractors determines the boundaries of the Board's jurisdiction, and consequently invokes one of this court's principal functions: ensuring that the Board exercises power only within the channels intended by Congress. Indeed, this court and our counterparts elsewhere have repeatedly taken the Board to task for exceeding its proper powers by characterizing independent contractors as employees. See, e.g., Yellow Taxi Co. v. NLRB, 232 U.S. App. D.C. 131, 721 F.2d 366, 381-83 (D.C. Cir. 1983) (MacKinnon, J.); see also id. at 382 n.37 (listing 12 Board assertions of jurisdiction, rejected by courts of ...


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