State Labor Relations Board Will Hear Owner-Operators’ Case

By John Voket

A complaint lodged by local school bus owner-operators with the State Department of Labor Relations will be the subject of a department hearing, according to owner-operators spokesperson Carrie Schierloh. Ms Schierloh told The Newtown Bee she was notified by the owner-operators’ attorney Henry F. Murray late Tuesday about the decision.

The collective of more than 30 owner-operators, which failed in a recent attempt to secure a new contract with the school district, allege the district violated the Municipal Employees Labor Relations Act (MERA).

The complaint specifically alleges a violation of Section 7-470(4) of MERA in that the board has failed to bargain with the owner-operators through their elected contract committee with respect to its decision to subcontract school bus driving responsibilities. The issue of a possible conflict between the owner-operators designation by the district as independent contractors, and their possible actual status as district employees, was first raised by a transportation consultant hired by Newtown School Superintendent Janet Robinson

That report by Mark Walsh of New York-based Transportation Advisory Services (TAS) identified a potential violation of Internal Revenue Service guidelines. The apparent conflict relates to the district’s classification, and the conditions under which that classification can legally be used by an employer for tax filing purposes.

The TAS consultant flagged the way Newtown’s current contract identifies the owner-operators as “independent contractors,” because the “district establishes strict work and performance rules” and the contracts provide for some defined benefits.

“The owner-operators are currently considered to be independent contractors, and therefore the district does not incur typical employee liabilities,” the consultant states in the report. “Although this certainly requires legal advice, based on our knowledge of other decisions in the school bus industry, and our reading of the IRS requirements, we are concerned about the independent contractor designation.”

The consultant then outlines a series of questions that help determine if the designation is legal:

*Does the company (district) control or have the right to control what the worker does and how the worker does his or her job?

*Are the business aspects of the worker’s job controlled by the payer? (these include things like how the worker is paid, whether expenses are reimbursed, who provides tolls/supplies, etc)

*Are there written contracts or employee-type benefits (i.e., pension plan, insurance, vacation pay, etc) Will the relationship continue and is the work performed a key aspect of the business (district)?

Terms And Conditions

The consultant then confirms that the district establishes specific routes, tells the operators when to leave, when to work, and determines the schedule. The owner-operators’ contract establishes strict work and performance rules.

The contract, according to the consultant, establishes the terms and conditions of the work to be performed. The report identifies that the district provides liability insurance, offers the owner-operators buy-ins to the district’s employee health plan, pays for drug tests and CPR training, as well as some equipment required on the privately owned buses.

The concern about possible IRS conflicts was cited as one of the two stated factors for TAS to recommend against continuing with the owner-operator system once the current contract expires in June 2012.

The DOL complaint characterizes Newtown’s owner-operators as “an organization that has existed for many decades whose only purpose is, and has been, through their contract committee, the negotiation and enforcement of contracts governing the terms and conditions of compensation and service on behalf of the school bus drivers who provide the transportation needs for the Newtown public schools.”

Mr Murray contends that while the labor relations board has never conducted a representation election certifying the Newtown owner-operators as the exclusive representative for individuals in the bargaining unit, the Newtown Board of Education has negotiated and bargained with the owner-operators’ contract committee for a series of successive five-year agreements going back several decades.

“A clear application of the facts to the statutory requirements will demonstrate that the Newtown owner-operators is an ‘employee organization’ as that term is understood and applied under MERA,” Mr Murray wrote.

Employer And Employee

The attorney states that the employment relationship between the Board of Education and the owner-operators is one that can be properly be characterized and categorized as that of employer and employee.

“The BOE has recognized the Newtown owner-operators and its contract committee for many years as the organization and bargaining representative for the school bus owner-operators,” Mr Murray wrote. “The Newtown owner-operators therefore asserts that it is an employee organization under the Act and that the Newtown BOE was under an obligation to bargain with its contract committee on the decision to subcontract the existing work that the owner-operators perform for the board. The board’s failure to do so is a violation of the Act.”

The attorney said he has written more extensively than usual in filing the complaint on behalf of the Newtown owner-operators because he believes labor relations officials need “to understand at the outset that this charge presents both substantial factual issues requiring resolution as well as substantive and important legal issues that will no doubt be raised by the respondent in defense to this prohibited practice complaint.”

Ms Schierloh said that no date had been set for the planned hearing.