December 21, 2000
Mr. John E. Higgins, Jr., Solicitor
National Labor Relations Board
1099 14th Street, NW
Washington, DC 20570-0001
Re: NMB File No. CJ-6701
NLRB Case No. 4-RC-19933
North American Aviation Service, PHL, Inc./FDH&W
Dear Mr. Higgins:
This responds to your September 22, 2000, request for the National Mediation Board's (NMB) opinion regarding whether North American Aviation Service, PHL, Inc. (North American or Employer) is subject to the Railway Labor Act (RLA), 45 U.S.C. §§ 151-181.
For the reasons discussed below, the NMB's opinion is that North American and its employees are subject to the RLA.
I. Procedural Background
This case arose as a result of a representation petition filed by Food Drivers, Helpers & Warehousemen, Local 500, International Brotherhood of Teamsters, AFL-CIO (Local 500 or Organization), with the National Labor Relations Board (NLRB) on March 9, 2000. The Organization seeks to represent a bargaining unit of all full-time and regular part-time Cargo Technicians, Mail Handlers, and Clerical Employees employed by North American in Philadelphia, Pennsylvania, at the Philadelphia International Airport (PHL).
At the July 24, 2000, NLRB hearing on the Organization's petition, North American asserted that it is subject to the RLA. The Organization took the position that North American is subject to the National Labor Relations Act (NLRA).
The NMB's opinion in this case is based on the information and record provided by the NLRB, which includes the post-hearing submissions of North American and the Organization, and position statements submitted at the NMB's request by North American and the Organization on October 12, 2000.
II. Contentions of the Organization
Local 500 contends that North American is not subject to the RLA. North American is not an air carrier and is not directly or indirectly owned by a carrier. The Organization further argues that North American does not meet either prong of the NMB's two-prong jurisdictional test. According to Local 500, North American is a freight forwarder. North American does not provide services traditionally performed by a carrier.
In addition, the Organization argues that there is insufficient evidence that North American is directly or indirectly controlled by a carrier. North American employees do not have any contact with airplanes. These employees wear North American uniforms. A sign outside the warehouse identifies the building as "North American." North American determines its own budget. Local 500 contends that there is no evidence in the record of any specific training provided by a carrier other than that which is required by FAA Regulations. North American employees are not supervised by a carrier. North American is responsible for hiring, firing, promoting, and disciplining its employees. Based on this evidence, Local 500 states that North American's operations are not controlled by a carrier, and the NMB should not assert jurisdiction.
III. Contentions of North American
North American states that it manages and handles commercial cargo for US Airways at PHL. These services include receiving and discharging cargo; preparing cargo documentation; preparing cargo for loading; and loading and unloading cargo. North American contends that since its employees perform work traditionally performed by air carrier employees and the Carrier controls North American's operations, the NMB should assert jurisdiction.
North American contends that it meets both the function test and the control test established by the NMB. Cargo handling is a function traditionally performed by employees in the airline industry and there is substantial evidence of carrier control.
Specifically, North American argues that its services are directed in detail by the Carrier. US Airways owns the building in which North American works; pays the rent on the building; and owns the telephones, computers and all of the software used by North American's employees. In addition, all cargo handling equipment is provided by the Carrier. Candidates for employment with North American must complete a training program designed and conducted by US Airways. The Carrier also requires that the candidates submit to fingerprinting and drug testing prior to being hired. US Airways periodically inspects training records and background checks; sets the rates for shipping; and issues building access cards to North American's employees.
North American's employees answer the telephone in the Carrier's name and the telephone listing for the North American warehouse is under the name of US Airways. A sign outside the warehouse identifies the building as "US Airways Cargo." US Airways' management officials with offices in the North American warehouse maintain direct supervision over North American's employees. These managers can and do discipline North American's employees. Twice a year, US Airways audits North American's operations to ensure compliance with US Airways' regulations. Furthermore, North American's General Manager meets daily with US Airways' Cargo Service Manager. All of these facts, North American argues, lead to the conclusion that US Airways exercises control over North American's operations.
A. Applicable Legal Standard
When an employer does not fly aircraft for the transportation of freight or passengers, the NMB applies a two-part test in determining whether an employer and its employees are subject to the Railway Labor Act. Federal Express Corp., 23 NMB 32 (1995). First, the NMB determines whether the nature of the work is that traditionally performed by employees of rail or air carriers -- the "function" test. Second, the NMB determines whether the employer is directly or indirectly owned or controlled by, or under common control with, a carrier or carriers -- the "control" test. Both parts of the test must be satisfied for the NMB to assert jurisdiction. Ogden Aviation Services, 23 NMB 98 (1996).
North American does not fly aircraft and is not directly or indirectly owned by an air carrier. Therefore, to determine if North American is subject to the RLA, the NMB must consider both the work performed for, and the degree of control exercised by, its air carrier customers.
B. North American's Employees Perform Work Traditionally Performed by Employees of Air Carriers
North American provides cargo handling services to US Airways at PHL. According to the NLRB record, US Airways performed this work until three years ago, when it subcontracted to North American. It is well established that cargo handling is work traditionally performed by air carrier employees. Evergreen Aviation Ground Logistics Enterprises, Inc., 25 NMB 460 (1998); Federal Express, above; Ground Handling, Inc., 13 NMB 116 (1986).
Therefore, the NMB concludes that North American's employees perform functions traditionally performed by airline employees.
C. US Airways Exercises Substantial Control Over North American
The Air Cargo Handling Service Contract (Contract)between Air Cargo Inc., (ACI) and North American sets forth the terms and conditions under which North American provides cargo handling services for US Airways at PHL. Under the Contract, ACI is an agent for US Airways. (NLRB Ex. ER 5, Contract.) US Airways requires North American to submit weekly invoices and activity reports. US Airways sets forth specific billing requirements for North American. The Contract sets forth detailed specifications for all services provided by North American including: instructions for handling "outbound" and "inbound" products; customs requirements; hours of operation; forms to be utilized; specifications for handling domestic cargo and international cargo; and specifications on accounting procedures and freight charges. North American must "notify US Airways of any complaints and or claims made by US Airways' clients and . . . follow the procedures for claims as outlined in US Airways's Cargo Manual Tariffs and/or publications." (Contract Exhibit B, Section 12.0.)
The Contract states that US Airways provides the telephones and pays for telephone service at the "freight facility to permit [North American's] personnel to transact business required for US Airways' customers." The telephone number for the cargo handling facility is listed as "US Airways" in the telephone directory. The Carrier dictates how North American employees answer the telephone. (Contract Exhibit B, Section 6.2.) Williams testified that North American's employees answer the telephone by saying, "this is US Airways, how can we help you." The Contract provides that all phone calls shall be answered within four rings. Answering devices are not permitted during regular business hours.
US Airways provides the operations facility used by North American at PHL. In addition, US Airways pays the cost of the facility rent, telephone and data system lines. A sign outside the operations facility identifies it as a US Airways facility. (Contract Exhibit B, Section 18.2.) US Airways provides North American with a US Airways (PACER) computer terminal and printer, all necessary forms, documents, air trays, pallets, nets, kennels and unit load devices. US Airways provides all necessary manuals and tariffs. North American's General Manager, Terrance E. Williams, testified that the only special handling equipment North American provides is a forklift. According to the Contract, North American is responsible for providing its own office products and equipment such as photo copiers. (Contract Exhibit B, Section 13.)
The Contract provides that "all employees must be attired in uniforms acceptable to US Airways" and must be "groomed in accordance with US Airways' standards." (Contract Exhibit B, Section 6.1.) Williams testified that North American's uniforms bear the North American logo, but are the same color as US Airways' uniforms. US Airways issues facility access cards to North American employees.
US Airways provides training "in all aspects of the operation" to North American employees. US Airways provides the training materials for these classes as well as air transportation to the training site. All employees must satisfactorily pass US Airways' Dangerous Goods training program. The Contract requires background and security checks, including finger printing and drug screening, for all candidates for employment. The Carrier refunds North American for expenditures related to background checks. The Carrier has the right to inspect these records. US Airways audits North American's business and personnel records and its operations at least twice a year.
US Airways' managers attend and participate in the weekly North American manager meetings. Williams testified that he follows the instructions and directives provided by US Airways' managers. US Airways' employees work in the North American operations facility.
North American hires, fires, disciplines, and supervises its employees. However, Williams testified that as a practical matter, US Airways supervises and controls North American employees. Williams stated that US Airways' managers are in the North American facility daily and will correct North American employees when they observe North American employees doing something incorrectly. Williams also testified that if North American needed to increase the number of full-time employees, then North American would need US Airways' approval. The record further establishes that US Airways effectively recommended the termination of one employee within the nine-month period preceding the NLRB hearing. US Airways also plays a significant role in North American's hiring of managers and supervisors. According to Williams, US Airways' managers will bring problems to North American's attention. Williams testified about specific instances in which US Airways informed North American of problems with employees, safety concerns, and concerns about the efficiency of the third shift operations. Williams stated that North American took steps to address the Carrier's concerns.
The record establishes that US Airways exercises substantial control over North American and its employees.
Based on the record in this case, and for the reasons discussed herein, the NMB's opinion is that North American and its employees are subject to the Railway Labor Act. This decision may be cited as North American Aviation Service, PHL, Inc., 28 NMB 155 (2000).
By direction of the NATIONAL MEDIATION BOARD.
Stephen E. Crable
Chief of Staff
Paul I. Weiner, Esq.
Robert C. Cohen, Esq.
Mr. Edward F. Keyser, Jr.