Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen v. National Labor Relations Board 512 F.2d 564

Opinion

PER CURIAM.

Opinion filed by Chief Judge BAZELON, concurring in part and dissenting in part.

PER CURIAM:

This case involves a determination by the National Labor Relations Board (the Board) that Local 814 of the Teamsters Union violated sections 8(b)(4) and 8(e) of the National Labor Relations Act, 29 U.S.C. §§ 158(b)(4) and 158(e) (1970), by entering into and attempting to enforce a provision of its collective bargaining agreement with Santini Brothers, Inc. For the reasons stated herein, we remand the record for clarification.

Prior to 1948, movers of household goods and office furniture in the New York metropolitan area utilized employees represented by Local 814 of the Teamsters Union to perform all aspects of their business. However, in that year, a large interstate moving company began utilizing “owner-operators” for so-called long distance hauling, moves in excess of 500 miles. The owner-operators own the tractors that pull the trailers used in long distance moving, contract with the moving companies for hauling business and generally lease the trailers from the company. This method of performing long distance hauling proved attractive to both drivers and companies, and presently, the twenty New York area carriers that perform the bulk of long distance hauling use owner-operators. Santini Brothers, Inc., one of the largest movers in that area, began using owner-operators in 1962 to counteract the deterioration in its long distance moving business as its best drivers became owner-operators for competitors; by 1967, Santini used owner-operators for virtually all of its long distance moving.

Local 814’s concern with the practice of using owner-operators first manifested itself in the 1962 — 1965 collective bargaining agreement between the union and the Moving and Storage Industry of New York, a multi-employer bargaining unit representing approximately 300 area moving and storage companies including Santini. This agreement, and subsequent contracts through 1971, provided that: “the owner-operator, commission or percentage method of operation shall not be practiced on local work covered by this agreement. The percentage or commission method of operation shall likewise not be practiced on long distance moving.” These agreements also provided for joint study to explore the effects of utilizing owner-operators for long distance hauling.

*566In the 1971 negotiations between the union and the industry, the union demanded that all persons involved in long distance moving be treated as employees under the contract, regardless of whether they had been defined as owner-operators. From initial opposition, the employers acceded to .the union’s demands, accepting the following provision in Article 24 of the agreement.

A.l. All persons performing long distance driving under contract to an employer covered by this agreement (whether as “owner-operator,” “percentage driver,” “commission driver,” or otherwise) shall be covered by this agreement as employees (hereinafter referred to as contract employees).

Since the collective bargaining agreement contained a union security clause, the effect of this provision was to require that the owner-operators join Local 814 or lose their contracts.

The union sought to enforce Article 24 in the spring and summer of 1972 by advising Santini that it was violating the agreement and by notifying the owner-operators that they were required to join the union. On October 30, 1972, Local 814 engaged in a work stoppage to protest Santini’s failure to implement Article 24. The work stoppage ended only after Santini’s President agreed to transmit signed membership applications from the owner-operators as he obtained them and to forbid nonsigners to load or unload in the New York metropolitan area. Several owner-operators refused to apply for membership. Thereafter, Santini allowed those who joined Local 814 to load and unload in New York, but not those who refused to join.

On November 8, 1972, Karl J. Lieb, on behalf of several owner-operators, filed unfair labor practice charges against Local 814 and Santini.1 On June 29, 1973, an Administrative Law Judge (ALJ) found that Local 814 had violated the “secondary boycott” provisions of the National Labor Relations Act2 and that Local 814 and Santini had entered into an illegal agreement because Article 24 was a prohibited “hot cargo” clause.3 On January 8, 1974, the Board affirmed this decision without comment. Local 814, Teamsters (Santini Brothers, Inc.) 208 NLRB No. 22 (1974).

By adopting the ALJ’s opinion, the Board held that the owner-operators were not employees within the meaning of section 2(3) of the Act, 29 U.S.C. § 152(3) (1970), but rather were “independent contractors.” Therefore, the Board concluded that Article 24 itself and the union activity aimed at enforcing Article 24 were directed at forcing Santini to engage in conduct prohibited by the Act, specifically to coerce the independent contractors to join the union or to cease doing business with them.

Local 814 contends initially that the Board erred in concluding that the union violated sections 8(b)(4) and 8(e) of the Act, for even if the owner-operators were independent contractors, Article 24 is a legitimate work preservation clause.4 We cannot agree. As written, Article 24 neither establishes union work standards for the subcontracting of work nor requires that specific work be done by members of the bargaining unit. Rather, Article 24 purports to require the owner-operators to join the union by defining them as “employees,” and hence subjecting them to the union security agreement.. If Article 24 were drafted to require that only members of Local 814 may engage in long distance hauling *567or that any subcontracting to owner-operators must be consistent with union work standards, the case would be much different. However, the provision before us is clearly a union signatory agreement violative of sections 8(b)(4) and 8(e) if the owner-operators are not “employees.”5 6

As to this question, the Board adopted the opinion of the ALJ, which concluded that the owner-operators were not employees within the meaning of section 2(3) of the National Labor Relations Act. However, shortly thereafter, the Board also adopted the decision of another ALJ in Local 814, Teamsters (Molloy Brothers Moving and Storage, Inc.), 208 N.L.R.B. No. 43 (1974), which concluded that owner-operators who contracted with another member of the Moving and Storage Industry of New York were employees within the meaning of the Act. We believe the two decisions are factually similar and ostensibly inconsistent. Because the Board has not explained its reasons for reaching different results,6 see Greater Boston Television Corp. v. F. C. C., 143 U.S.App.D.C. 383, 444 F.2d 841, 850-52 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971), we remand the record for clarification. If the Board finds the two indistinguishable, it should so inform the court. See N. L. R. B. v. Metropolitan Life Insurance Co., 380 U.S. 438, 442, 85 S.Ct. 1061, 13 L.Ed.2d 951 (1965).

Chief Judge Bazelon dissents from the scope of this remand, arguing that it can only produce a post hoc rationalization for the Board’s actions. We cannot agree. This court has continually stressed that we are partners with, rather than adversaries to, the administrative agencies. See, e. g., Greater Boston Television Corp., v. F. C. C., supra, 444 F.2d at 851. As such, we think it only fair to give the agency a full and frank opportunity to explicate its actions before we consider reversal. While the possibility exists that the agency will offer a post hoc rationalization, that possibility also exists under Judge Bazelon’s broader proposal. Indeed, we believe that Judge Bazelon’s proposal would heighten the possibility that the agency might substitute rationalization for reasoning, since his call for a “thorough reconsideration of the doctrinal quicksand in this area” would place the court firmly in an adversary position to the Board.

Moreover, we cannot agree with the dissent’s characterization of the circumstances under which the remand for clarification may be utilized. Most recently, this device was utilized in Local 441, IBEW v. N. L. R. B., 167 U.S.App. D.C. 53, 510 F.2d 1274 (1975) the division sought clarification, inter alia, of the Board’s position concerning the legal *568effect of the conduct at issue. We therefore believe that the remand for clarification remains a useful and appropriate device for determining that an agency has engaged in reasoned decision making.

So ordered.

BAZELON, Chief Judge

(concurring in part, dissenting in part):

I agree that Article 24 is not a work preservation agreement but rather a union signatory agreement. The validity of the Board’s decision thus turns on whether it properly adopted the finding of the Administrative Law Judge that the owner-operators of Santini were “independent contractors” and not “employees”. On consideration of that issue, I find myself in a maze of precedents with few standards for decision discernable. I, of course, note that Congress has quite clearly commanded that the common law definition of “independent contractor” be the basic guide for distinguishing between “employees” and “independent contractors.” 1 This does not mean that considerations of labor policy are irrelevant2 but that they be considered in light of the common law test of “control”. Under this test the degree of control which an employer exercises over a worker determines whether the worker is an “employee” or an “independent contractor.”3 How great a degree of control must exist, how that control is to be quantified and how various incidents of control are to be weighed comparatively are questions left unanswered by Congress and by the Board in its various efforts in this area. We are, however, required to defer to the Board’s determination if that determination involves a reasonable choice among competing considerations.4

The competing considerations in this case are as follows. On the side of “independence”, I notice that the owner-operators own their own “tools”, the tractor cab; that they are paid by the job and not by the hour; that they receive no workmen’s compensation or retirement benefits; that they are responsible for all costs associated with hauling, including repairs and maintenance, road taxes, living expenses, damage insur*569anee, and packing materials; that they may refuse loads and may determine their routes once they accept a load; and that they may hire their own assistants to aid in loading and driving.5 On the other hand, in favor of employee status, I find that the “tools”, the tractor cab, is leased exclusively to Santini and the driver has no right to use it on jobs other than with Santini; that the payment by the job is largely dependent on set rates established by the ICC, the driver receiving a variable percentage depending on what services he performs; that the owner-operator by custom if not by contract works only for Santini and does not drive for other carriers 6; that Santini requires driver compliance with workmen’s compensation laws, requires certain kinds of liability insurance, requires a deposit of $3,000 to insure driver compliance with various safety and other regulations; that loads must be delivered within a set time; and that Santini’s arrangements with United Van Lines require the owner-operators working on United jobs to attend United driver training school and to follow the United drivers’ manual.7 Perhaps more important than all of these factors is the *570pervasive government regulation of interstate hauling with the attendant rules and procedures imposed upon the licensed carrier (here Santini) and through the carrier on the owner-drivers.8 Santini, of course, requires that its owner-drivers comply with government regulations. It is not immediately clear to me which way these regulations count, toward “independence”, toward “employee” status or neutral on the question of independence.9

I note one argument drawn from the national labor policy which supports the Board’s position. Here the union sought to impose economic sanctions on an employer to force the employer to coerce employees not members of the union to join the union. This is not a case where a group of employees has joined a union and seeks to bargain with the employer. Thus, the definition of “employee” in this case — in a manner unlike a case where the workers seek to bargain after joining a union — involves the § 7 rights of the relevant workers.10 The TaftHartley Act in its essential structure operates to proscribe efforts by unions to garner jurisdiction over employees without a free choice on their part to forego individual bargaining and embrace collective bargaining.11 Article 24, which operates as a union signatory agreement, is in derogation of this central policy of Taft-Hartley. With this in mind, the union’s charge that Santini and the owner-operators have deliberately drawn their agreements to avoid “employee” status is transformed into a powerful argument against the union’s position, viz. that the owner-operators exercising their § 7 right not to join a union have opted instead for individual bargaining. The union’s apparent remedy under the structure of the NLRA is to organize the owner-operators, to force an alteration in the contracts between the operators and Santini and thereby create an “employee” status. To do this, of course, the union must obtain the consent of the owner-operators which apparently it does not have. The union’s attempt to create “employee” status through pressure on the employer to cause indirect pressure on the owner-operators finds no support in national labor policy.

This argument is, however, defeated for the present by an apparent inconsistency between the Board’s decision in this case and in the closely related case of *571Molloy Brothers Moving and Storage.12 Molloy also involved Local 814 and the Moving and Storage Industry of New York, and particularly concerned whether the owner-operators of Molloy were employees or independent contractors. An Administrative Law Judge different from the one that decided this case held that the Molloy owner-operators were employees and not independent contractors. The Board also affirmed Molloy without opinion. There is no apparent distinction between Molloy and the case sub judice. While there was more evidence in Molloy of owner-operator compliance with work rules promulgated by Allied Van Lines with whom Molloy Brothers were affiliated, the extent of Molloy’s right of control13 was no larger than Santini’s and both extended well beyond the requirements of government regulation through use of drivers’ manuals. The Board in its brief suggests that Molloy’s health insurance plan and a profit-sharing plan serve to distinguish it from Santini. I do not think, in the absence of Board explanation, that these two relatively minor distinctions are sufficient to justify different results. I further note that the Board’s decisions in general on the status of truck drivers who own their vehicles seem difficult to reconcile.14

The requirement of a reasoned decision is central to judicial review of administrative action. Fulfillment of this requirment mandates an ageny to reconcile within reason its precedents and to avoid inconsistent decisions.15 The ur*572gency of this requirement is underscored when an agency is charged with administering a broad statutory mandate — such as we confront here — and when courts must by necessity defer to the agency judgment. In this ease, I face conflicting decisions of Administrative Law Judges, decisions which the Labor Board has chosen to affirm without opinion. These conflicting decisions exist against a background of barely reconcilable precedents and of a failure of the Labor Board to provide a reasoned basis for its decisions regarding the definition of “employee.”

The Court decides to remedy the situation by remanding the record for supplementation on the issue of the. inconsistency between Molloy and the case sub judice. I agree that the Board must develop a distinction between the cases before this Court may affirm its decision, but I do not think that a remand of the record alone is, on the facts of this case, a sufficient remedy for the Board’s failure to provide a reasoned decision of this case. This case in my view presents a classic example of where a diligent reviewing court could determine through a variety of factors that the agency had not given the problem a “hard look”, Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 444 F.2d 841, 850-52 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). A remand of the record alone can produce only a post hoc rationalization of the inconsistency between Molloy and this case. Such post hoc rationalizations have been consistently held to be inadequate to justify an otherwise vulnerable decision.16 The reason of this rule is that an agency might simply search for an explanation, in this case a distinction, to satisfy the requirement of a reasoned decision, regardless of whether the agency would have been genuinely impressed with the explanation or distinction if the matter were properly considered in the first instance. The wisdom of this rule is particularly evident when the agency’s error is the failure to give a “hard look” in the first place. Indeed, post hoc rationalizations are hardly the instrument to develop the standards for decision which are so conspicuously lacking in this area. It is my understanding that the record should be remanded for supplementation only when there are minor factual confusions or conflicts within an agency decision. I know of no authority for the proposition that the record may be remanded for supplementation when the agency has failed to comply with the requirement of a reasoned decision. I would reverse the Board and remand for a thorough reconsideration of the doctrinal quicksand in this area.