28 NMB No. 39

January 9, 2001

Mr. John E. Higgins, Jr.

Solicitor

National Labor Relations Board

Washington, DC 20570

Richard A. Siegel, Esq.

Associate General Counsel

National Labor Relations Board

Office of the General Counsel

Washington, DC 20570

Re:	NMB File Nos. CJ-6671 and CJ-6672

(NLRB Cases 4-RC-19619; 1-CA-36774)

Emery Worldwide Airlines, Inc.

Gentlemen:

The National Mediation Board (NMB) received two separate requests for the NMB's opinion of whether certain employees of Emery Worldwide Airlines (EWA) are subject to the Railway Labor Act (RLA), 45 U.S.C. §§ 151-188. This opinion responds to both requests. For the reasons below, the NMB finds that while EWA, when operating as a carrier, is subject to the RLA, its operations at issue here are not subject to RLA jurisdiction.

This opinion letter is based on the letters provided by the National Labor Relations Board (NLRB), NLRB case files and transcripts in 4-RC-19619 and 1-CA-36774, the transcript in a related hearing (C.N.F. Menlow Postal Logistics (Sub-Division of Emery Worldwide) and Teamsters Local Union No. 768, 12-RC- 8242), the hearing held in this matter at the NMB before Deputy Chief of Staff Benetta M. Mansfield on March 14 through March 16, 2000, and the post-hearing positions and evidence submitted by the EWA and the International Brotherhood of Teamsters (IBT) to the NMB.

I. PROCEDURAL HISTORY OF CJ-6671

The underlying NLRB proceeding involves a petition filed by the IBT, Local Union 500, to represent a unit of truck drivers employed by EWA at the Swedesboro, New Jersey, Priority Mail Processing Center (PMPC). A hearing was held before an NLRB Region 4 Hearing Officer on February 11 and 12, 1999. At the hearing, counsel for EWA contended that the employees were subject to the RLA.

The Regional Director issued a Decision and Direction of Election on July 2, 1999. She ruled that the NLRB had jurisdiction over EWA based upon the following conclusions:

1) The NLRB previously asserted jurisdiction over Emery Air Freight, Inc. (EAF), in line with its longstanding policy to assert jurisdiction over freight forwarders and trucking companies.

2) Although the NMB has asserted jurisdiction over EWA, it has never asserted jurisdiction over any freight forwarding operations of EWA.

3) EWA and EAF are highly integrated companies which hold themselves out to the public as "Emery Worldwide."

4) Although the employees at issue are employed by EWA, there must be a direct connection between the work involved and the transportation activities covered by the RLA.

5) The employees' primary function and EWA's primary business interest are transporting freight and U.S. mail, not the operation of an airline.

6) Therefore, the work performed is functionally identical to the work performed by EAF employees, and this EWA operation falls within National Labor Relations Act (NLRA) jurisdiction.

EWA requested NLRB review, asking to have the matter referred to the NMB for a jurisdictional determination. By a vote of the NLRB, the matter was referred to the NMB. The referral letter asked the NMB to consider the following issues:

1. Advise whether the NMB has jurisdiction over the employees at issue.

2. Provide the NLRB with the NMB's views of the Regional Director's findings and analysis, particularly with respect to the application of Trans World Airlines, 211 NLRB 733 (1974), for the proposition that there must be a direct connection between the work involved and the transportation activities covered by the RLA.

3. Address whether changes in corporate structure are dispositive of jurisdiction.

See August 26, 1999, letter from John E. Higgins, Jr., NLRB Solicitor, to Stephen E. Crable, NMB Chief of Staff.

II. PROCEDURAL HISTORY OF CJ-6672

IBT, Local Union 404, filed an unfair labor practice charge in NLRB Region 1, alleging that EWA violated sections 8(a)(1) and (3) of the NLRA when it discharged employee Frederick Haska on October 29, 1998, for his union activities. At that time, Haska was active in an IBT organizing drive of the truck drivers and mail sorters at EWA's Springfield, Massachusetts, PMPC. During the unfair labor practice investigation, EWA asserted that it is subject to RLA, not NLRA, jurisdiction. EWA and IBT submitted position statements regarding jurisdiction to the NLRB.

The NLRB first referred this matter to the NMB on July 11, 1999. Subsequently, EWA requested NLRB review of the case before Region 4. In a letter dated July 26, 1999, the NLRB withdrew the referral of this matter from the NMB, reserving the option to resubmit it at a later date. On September 24, 1999, the NLRB resubmitted the matter for an opinion. The referral asks the NMB to answer the same inquiries as in 4-RC-19619.

III. POSITIONS OF EWA AND IBT

EWA contends that the employees of the PMPCs are employees of EWA, a "common carrier by air," subject to the exclusive jurisdiction of the NMB. EWA further contends that all of its employees are subject to EWA's "continuing authority to supervise and direct the manner and rendition of . . . [their] service" pursuant to 45 U.S.C. § 181 and are, therefore, under the RLA.

The IBT does not dispute that EWA is the employer, but urges the NMB to adopt the test set forth by the NLRB in TWA, above,1 and not simply to assert jurisdiction based on the employing entity.

IBT claims that 45 U.S.C. § 181 must be read in conjunction with sections 182 and 151, to limit RLA coverage to employees in "traditional RLA jobs." It notes that § 181 extended RLA coverage to air carriers, but, in doing so, incorporated "[a]ll of the provisions of subchapter 1 [of the RLA]." By incorporating these provisions, IBT argues that this included section 151's definition provisions. Thus, IBT contends that § 182 requires:

[T]he duties, requirements, penalties, benefits and privileges prescribed and established by the provisions of subchapter I . . . shall apply to carriers and their employees in the same manner and to the same extent as though the carriers and their employees were specifically included within the definition of "carrier" and "employee," respectively, in section 151 of this title.

IBT contends that the interplay among these sections (181, 182, and 151) establishes that RLA coverage of "employees" is limited by the definition set forth in § 151, Fifth, which specifically incorporates the performance of railway work in the term employee:

The term 'employee' as used herein includes every person in the service of a carrier (subject to its continuing authority to supervise and direct the manner of rendition of his service) who performs work defined as that of an employee or subordinate official in the orders of the Surface Transportation Board, now in effect, and as same may be amended or interpreted by orders hereafter entered by the Board pursuant to the authority which is conferred upon it to enter orders amending or interpreting such existing orders . . . . [Emphasis by IBT].

Therefore, the IBT argues that whether the employee performs work substantially or directly related to air transportation, the work must be evaluated by the NMB in its determination of jurisdiction.

Specifically citing the trucking service exemption in § 151's definition of carrier, the IBT also contends that there is statutory support for the proposition that employees of trucking companies should be excluded from RLA coverage.

Finally, the IBT asserts that the NMB should not permit EWA to achieve jurisdiction through an intentional "corporate shuffle" intended to defeat the Organization's organizing campaign.

IV. ISSUES PRESENTED

Is EWA subject to RLA jurisdiction regardless of employee job functions?

V. FINDINGS OF FACT

A. Structure of CNF, Inc.

CNF Transportation, Inc. (CNF) is a multi-billion dollar diversified transportation company based in Palo Alto, California. Its 1998 Annual Report states:

CNF Transportation, Inc. is a diversified holding company with businesses in regional less-than truckload trucking, multi-modal full truckload, multi-client warehousing, and expedited and guaranteed ground transport (Con-way Transportation Services); domestic and international air freight, ocean and customer brokerage services (Emery Worldwide); full service logistics management (Menlo Logistics); postal sortation and transportation services (Emery Worldwide Airlines); trailer manufacturing (Road Systems), and wholesale truck parts sales (Vantage Parts).

According to EWA exhibits at the hearing, CNF is made up of the following corporate entities which themselves have a number of wholly-owned subsidiaries:

Centron, Ltd.; CNF Financial Services Corporation; CNF International Holdings Corp. (4 subsidiaries); CNF International Holdings, Ltd. (1 subsidiary); CNF Properties, Inc.; CNF Service Company, Inc.; Con- way Transportation Services, Inc. (5 subsidiaries); Emery Air Freight Corporation (28 subsidiaries); Emery Expedite! Inc.; Emery Insurance Company Limited; Emery Worldwide Airlines, Inc.; Menlo Logistics, Inc. (2 subsidiaries); Road Systems, Inc.; and WSCPI, Inc.

In most publically available documents, CNF is described in segments, a format required by the Securities and Exchange Commission (SEC). The segments are defined by CNF, not the SEC. For example, form 10-K for the year ended December 31, 1998:

The continuing operations of [CNF] encompass four business segments: Con-way Transportation Services (Con-way), Emery Worldwide (Emery), Menlo Logistics (Menlo) and Other. . . Emery provides expedited and deferred domestic and international air cargo services, ocean delivery, and customs brokerage. Domestically, Emery relies primarily on aircraft operated by Emery.

Describing the Emery Worldwide segment, the 10-K states:

Emery Worldwide (Emery) was formed when [CNF] purchased Emery Air Freight Corporation (EAFC) in April 1989. EAFC provides both domestic and international freight services. In North America, EAFC relies principally on the dedicated aircraft of a separate subsidiary of the company, Emery Worldwide Airlines, Inc. (EWA) and EAFC's own ground fleet . . . .

In addition to providing aircraft for EAFC's commercial air freight operations, EWA also provides air delivery services for Express Mail (a next-day delivery service) under a ten-year contract with the [United States Postal Service]. . . . In addition, EWA has also received separate contracts to carry peak- season Christmas and other mail for the USPS.

The postal contract also appears in EWA's 10-K description of the "Other" segment. While EWA argues that Emery Worldwide is not a legal corporate entity, CNF widely markets Emery Worldwide as if it is a corporate entity comprised of both EAFC and EWA. It also uses Emery Worldwide as a descriptor on its website and other marketing materials. In some cases, the IBT- represented EAFC employees have collective bargaining agreements with Emery Worldwide. There is also evidence that Emery Worldwide has entered into contractual agreements with airline carriers such as Gemini Air.

Both the officers and directors of the various companies within CNF appear to move about rather fluidly and hold positions in different entities. For example, Gregory Quesnel is Chairman of the CNF Board of Directors and President and CEO of CNF Transportation, Inc. Gerald L. Detter is Senior Vice President of CNF Transportation Inc., and President and CEO of Con-way Transportation Services. Roger Piazza is Senior Vice President of CNF Transportation Inc. and President and CEO of Emery Worldwide. Kent Scott, President and CEO of EWA states that he reports directly to Piazza in his capacity as Senior Vice President of CNF, not in his capacity at Emery Worldwide. John W. Williford is Senior Vice President of CNF Transportation Inc. and President and CEO of Menlo Logistics. Edward J. Kelly is Vice-President, Controller and Treasurer of EAFC and is Treasurer of EWA. Robert Conlon is on the EAFC Board of Directors and is Assistant Treasurer of EWA.

B. Emery Air Freight Corporation

EAFC is a freight forwarding company engaged in the transportation of freight, including mail. Like EWA, EAFC forwards time-sensitive documents, packages and freight overnight. Emery Air Freight Co. d/b/a Emery Worldwide, 289 NLRB 1395 (1988). EAFC has no airline operation, although it contracts some of its business to EWA.

In multiple locations, EAFC employees are IBT represented and covered by the NLRA. In many of these locations, the collective bargaining agreement is with Emery Worldwide. EAFC has a hub in Dayton, Ohio. The two to three thousand workers in the Dayton hub are unrepresented. Virtually all freight passes through the Dayton hub. At Dayton, workers sort the freight, including non-priority mail which is handled by EAFC. The mail is not sorted by zip code, but by destination city or airport. Many EAFC facilities are located at or near airports and close to the PMPCs established by EWA under the priority mail contract. As explained more fully below, the workers at the Dayton hub also handle priority mail when it is routed through the hub to destinations outside of the 10 PMPCs on the East Coast. EAFC has an arrangement with EWA whereby EWA provides air transportation for EAFC freight. EWA also subcontracts with Ryan International and Express One to carry EAFC freight.

C. EWA

EWA is a Nevada corporation with its principal place of business located at the Dayton Ohio International Airport, Vandalia, Ohio. EWA operates approximately 73 aircraft either with its own pilots or with contract pilots from other companies. Many of its aircraft bear EWA colors and "Emery Worldwide" on the side. There are also aircraft bearing United States Postal Service (USPS) colors. EWA employs over 5,100 employees in a full range of positions, including flight deck crew, mechanics and related, dispatchers, fleet service and ramp, office clerical and administrative. Out of the 5,100 employees, approximately 1,400 work at the PMPCs. These employees are drivers, CART operators, sorters and dock workers. The Postal Operation also has its own Network Management Center (NMC) that is staffed by employees hired to exclusively service the postal operation. Prior to the award of the postal contract, the NMB found EWA is a carrier by air under the RLA. Emery Worldwide Airlines, 24 NMB 409 (1997) (certification of flight deck crew craft or class); and Emery Worldwide Airlines, 23 NMB 168 (1996).

The PMPC employees receive EWA paychecks, handbooks and corporate benefits, including flight benefits afforded to other EWA employees. They wear EWA uniforms different from those of EAFC employees.

EWA has an Airline Operations Committee composed of Kent Scott, President and CEO of the airline; Jerry Trimarco, Co- President of the airline responsible for postal operations; Roger Piazza, Senior Vice President of CNF Transportation Inc., and President and CEO of Emery Worldwide; and Chutta Ratnathican, Senior Vice President and Chief Financial Officer of CNF.

From the record, it is difficult to discern the precise role of the Airline Operations Committee. It is unclear what role the Committee plays in the day-to-day management of the airline. This Committee was created by resolution of the EWA Board of Directors on March 25, 1999. The Committee meets in conjunction with quarterly CNF Board of Director meetings and holds special meetings and conference calls as necessary. No minutes of the quarterly meetings or conference calls were provided to the NMB. The Committee has held two special meetings. The minutes, which appear to outline the meetings were provided. From a meeting on March 10, 20002 (one week prior to the NMB hearing in this matter), the minutes state:

Mr. Trimarco then raised several issues for the information of the members, and consideration for presentation to the Board of Directors at the next meeting. Mr. Trimarco referred to the aircraft fleet reliability, and the mechanicals which have been experienced recently. Mr. Trimarco also referred to the concerns raised by the US Postal Service regarding backhaul service performances. Finally, discussion was held with regard to a working plan for fleet reliability.

The minutes of an August 24, 2000, meeting refer to the "recently completed" collective bargaining agreement between EWA and its pilots and other airline matters apparently not directly relevant to the postal operations.

Scott, President and CEO of EWA, states that he reports directly to Piazza as Senior Vice President of CNF, and not in Piazza's capacity at Emery Worldwide.

However, the record reflects two parallel levels of operation within EWA. Scott operates the airline and has a management structure directed solely to the airline operation. On the other hand, Trimarco's time and structure is devoted entirely to operation of the postal contract.3 For example, John Kowalski is Vice President for postal operations (but there is another vice- president for airline operations under Scott). Hank Bartos was hired by Trimarco from EAFC as the Director of PMPC operations. Bartos also came from EAFC. Bartos in turn hired two PMPC Division Managers (both of whom formerly worked for Roadway Package Systems) and the 10 PMPC managers. The PMPC managers hired the PMPC supervisors and human relations people. Trimarco testified that he has 10 managers who report directly to him (all of whom deal solely with the postal operation) including the Director of Finance, Director of Security, Director of Contract Administration, Director of Operations, Director of Network Management Center (NMC), and Director of Commercial Air Operations. Trimarco admitted that there is a parallel Director of Finance, Director of Security and Director of Operations for the airline which report directly to Scott. In questioning, Trimarco knew little about the operation or equipment of the airline.

D. Contract between USPS and EWA

In April 1997, the USPS awarded a Priority Mail contract to EWA. The contract had a 58-month duration with two, three-year renewal options.4 The work awarded to EWA was previously done by postal workers represented by the American Postal Workers Union (APWU). The value of the contract is $1.7 billion. In order to fund the operations required by the contract, EWA borrowed $2 million dollars from its parent, CNF.

Prior to the award of the contract the USPS provided the APWU with an outline of the priority mail contract program. The outline envisioned an operation as follows:

For destinations 650 miles away or closer, Priority Mail would have dedicated, direct, surface routes between PMPCs. There would be no intermediate stops at other destinations since this would impact service. We would send less mail on air transportation due to increased surface reach. This would allow us to provide better service and better utilize a less expensive mode of transportation. [IBT exhibit 27 at 12.]

The contract required EWA to set up 10 PMPCs by a certain date and to ensure priority mail delivery within two days. Although the contract does not place a limitation on subcontractors, those under the contract had to be approved by USPS if the contractors did not have a purchasing system approved by a Federal government agency. Certain other contractors doing work under the contract and utilized by EWA needed the prior consent of USPS. EWA set up the PMPCs along the East Coast of the United States. The PMPCs are located in Miami; Jacksonville; Orlando; Pittsburgh; Philadelphia; Newark; Bethpage, New York; Springfield, Massachusetts; Nashua, New Hampshire; and Rochester, New York.5

The PMPC employees are employees of EWA. When first established in March or April 1997, the PMPCs were referred to as Menlo Postal Logistics. Although the contract was between USPS and EWA. In mid-1998, the name of the PMPC operation was changed to CNF Postal Logistics. There is no evidence that these were corporate names. The evidence is that these names were merely working titles. On September 21, 1998, Trimarco sent a letter to all employees, which stated, in pertinent part: "In order to avoid confusion with our customer, our vendors and our employees, we are going to simplify our Company name to Emery Worldwide Airlines. This is effective immediately and will be reflected on all company materials."

Trimarco denies that the operation was ever run by Menlo Logistics. He states that he chose the name and that Menlo never operated the PMPCs or hired the employees. Nevertheless, CNF press releases indicate otherwise. In a CNF press release dated April 24, 1997, the corporation stated, in part, as follows:

Virtually every aspect of our core business will be integrated to provide the absolute best service available for the Postal Service. . . .

The total network, to be operated by Menlo Logistics, will employ more than 1,400 full-time employees and up to 1,000 more during the high-volume Christmas season. A fleet of more than 400 trucks with the USPS logo will be utilized to transport Priority Mail from post offices to the regional sortation centers.

Emery Worldwide Airlines will provide a dedicated fleet of at least 18 aircraft to transport Priority Mail within the Phase I eastern states corridors and for mail that originates within the corridors but is destined for delivery outside the eastern United States. Commercial air will supplement Emery's air fleet as necessary.

Con-way Truckload, the company's full volume truckload carrier, will be used for linehaul transportation with the Phase I corridors that can meet on-time requirements without air delivery. CNF's Road Systems, Inc. equipment manufacturer will provide Con-way with trailing equipment for the contract.

A May 29, 1997, CNF press release stated: "Menlo Logistics will obtain, equip and staff and operate 10 priority mail processing centers in major metropolitan areas and operate a fleet of 400 trucks for local delivery." In CNF's 1998 Annual Report, Williford (in the Menlo Logistics portion of the report) states that the EWA Postal Mail project reports to him and "Menlo's project management and engineering skills have contributed towards EWA's doubling of productivity (pieces of mail moved per hour) at the massive, Postal Mail project, which involves the premium services of all three CNF operating companies."

Based upon the evidence, it appears that at one point CNF or EWA had either Menlo Logistics running the project or contemplated having Menlo Logistics operate the PMPCs. That is not the case today. However, Trimarco admitted that this issue "may" have been discussed and there may have been discussion of which labor statute would cover the PMPC employees.

At the PMPCs, EWA assigns employees to various job classifications common to sorting and delivering mail. These job classifications include: drivers, sorters, dock workers, and CART operators. Other employees also transport the mail, via air, including: pilots, flight engineers, ground crews, and others. Priority mail is loaded on and unloaded off air carriers by subcontractor employees, not EWA employees.

Utilizing the attached chart, Trimarco described the PMPC and priority mail operation as follows:

Where [the chart states] originating pickup, . . . . this is where we go to the various plants [USPS properties] served by a PMPC, and any PMPC can serve anywhere from 10 to . . . 20 postal plants on the originating side. So our trucks [EWA trucks driven by EWA employees] will go to the postal plants ranging from 10 to 20 within a PMPC . . . [a]nd we will pick priority mail up, basically, on a schedule throughout the day, as late as . . . 11 p.m., even as late as midnight . . . in some cities.

We bring the mail into the PMPC [on chart, originating PMPC docks]. . . . When the trucks arrive and they are unloaded, the first thing that happens within a PMPC is the mail goes through a shape sort. Mail, basically under this contract, and priority mail normally, is shipped under three shapes, a flat, which is your express envelope type shape; a parcel, which is a small package or small box; and an outside, [which is] bigger than a parcel and less than 70 pounds.

The first thing that happens in all our PMPCs is . . . a shape-sort. We sort the flats from the outsides from the parcels. Then that mail, by shape, goes into primary sortation cells and conveyer equipment that will sort that mail . . . by the first digit of the zip code. . . . So, every piece of mail will get shaped to the first digit.

Then it goes to secondary sortation . . . [and] what basically happens here, off the originating mail, is all this mail is shaped to a three digit sort, to the first three digits [of the zip code] on the primary side. [The mail is then placed in a tray, a bag, a tub or an outside.]

After the . . . three digit sortation is complete, all the mail . . . going for originating transportation will go through what is called a CART [count, assign route tag] process. . . . It goes into our computer schedule in the CART system and [a CART operator] will plug that three digit zip code into the system. . . . That will generate a label for that mail [which is a bag, a tray, a tub or an outside]. . . . Now it ties into the network management center. This network management center has fed into this CART system airline schedules, commercial air schedules, line haul schedules that will determine what routing that particular zip code on that particular day is going to take. [This will then come out on the label.]

After the CART routing, you will have mail going to various modes of transportation on the primary side. . . . Mail can be routed to the EWA designated fleet . . . going to a designated aircraft.6 Mail could be loaded on surface transport. Mail can be loaded on commercial air. And then you have turnaround mail [mail that is picked up and delivered in the PMPC area].

[Pointing to the arrow on the chart that goes from the originating to the destinating side] [A]fter it [turnaround mail] completes the primary sort, goes to the other side of the building where the destinating sort is. What happens on the destinating sort . . . is that mail is now sorted by zip code to the fourth and fifth digit.

If [mail is going outside the PMPCs,] it would have a three digit sort, and would go on [an] aircraft. If mail stays within the PMPC or goes to another PMPC, it goes to the destinating side of the PMPC and gets a five digit sort.

[I] am going to take this primary sort that showed all the routings, and while all this is going on, when we start routing mail . . . there is all these networks. Information is flowing up into the network management center. Schedules, confirmation times, departure times. Obviously there is always information flowing down.

[Pointing to destinating PMPC docks on the chart] [D]estinating mail can arrive in a PMPC [on] several modes. One of the modes is from the commercial air carriers. . . . So we go to the airport and make several pickups a day, depending on the PMPC, load our trucks up with mail, bring it in to the destinating PMPC, the destinating side of the building. . . .

When it comes in here on the destinating side . . . it had to be three digit sorted from wherever it is coming in from . . . what we do here is do a shape sort again. We have got to sort the flats from the parcels on the destinating side, and then we take it down to the last two digits of the sort. . . . So we do a five digit zip code sort on the destinating side. . . . As we load up . . . we have a critical entry time of when those trucks need to leave each of these PMPCs on the destinating side of the building to get back to the various postal plants to meet the sortation window.

The PMPC employees have little or no interaction with airline employees. The work the PMPC employees perform is similar to the work of EAFC employees (e.g., sorting, trucking, handling). As set forth above, EAFC employees also handle mail between EWA and USPS.

Priority mail moving in and out of PMPCs moves by a variety of modes. Pursuant to the Hearing Officer's request, EWA produced a chart (Company exhibit 1) which revealed during the last six months of 1999, EWA flew 26.5 percent of the total volume of EWA priority mail on EWA equipment;7 and approximately 40 percent of the mail was flown by commercial carriers. During the same period the priority mail moved by surface transportation (locally, within PMPCs by local trucking and long-haul, between PMPCs)

EWA has contracts with other carriers who fly mail including Ryan International, Gemini Air, and Express One. Trimarco stated that these contractors carry about 10 percent of the mail. Gemini does not contract with EWA, but has a contract with Emery Worldwide.

E. Other USPS Contracts

EAFC is not a party to any agreements with USPS. EWA has three other contracts with USPS: CNET (for transporting Christmas mail), ANET (for the establishment and operation of a network for Postal Express Mail), and ASYS (for transporting First Class mail).

The CNET, ANET, and ASYS contracts are to transport mail. The terms of these agreements do not require EWA to set up facilities to sort by zip code. There is no dispute that some of the mail under these contracts is loaded, unloaded, and sorted by EAFC employees.

F. IBT Organizing Drives

When the PMPCs were created, IBT local unions in Springfield, Philadelphia and Miami began organizing the employees at the facilities. In all three locations, EWA claimed that it was covered under the RLA, not the NLRA. In Springfield, there is some evidence in the record of anti-union animus. At that location, Haska testified that a supervisor advised him that CNF Postal Logistics changed its name to EWA to avoid NLRA jurisdiction. Haska also alleged he was discharged for union activities.

G. The Regional Director's Decision

In 4-RC-19619, the Regional Director asserted jurisdiction over EWA. She ruled, in pertinent part:

The evidence establishes that EWA and EAF are highly integrated companies that hold themselves out to the public as a single integrated entity known as Emery Worldwide. However, EWA and not EAF employs the drivers at issue here. Having found that the Employer of the employees at issue is an air carrier does not end the inquiry. The decision whether the Board or the NMB has jurisdiction turns 'on the relationship between the work performed by the employees and the transportation activities covered by the RLA' rather than the identity of the employer. ServiceMaster Aviation Services, 325 NLRB No. 151, slip op. at 2 (May 15, 1998); Trans World Airlines, 211 NLRB 733 (1974). 'There must be a more direct connection between employees and the transportation function so as to warrant the special considerations for which Congress enacted the Railway Labor Act.' TWA, supra at 733. . . . In the instant case, the Employer's primary business interest is transporting freight and U.S. mail, not the operation of an airline. Though substantial, the Employer's aircraft operations are incidental to its freight forwarding operations as evidenced not only by the facts, but also by the Employer's marketing strategy . . . .

The Employer's employees at the Philadelphia PMPC are not involved in the operation of an airline. Like the rest of the Employer's business operations, the primary focus of the Philadelphia PMPC is to transport U.S. priority mail. The Employer's drivers transport priority mail to the Philadelphia PMPC by truck where other employees involved in the Employer's priority mail operations sort the mail. The mail is then loaded onto the Employer's trucks where it is either returned to the local Postal plant or transported to the Philadelphia International Airport. PMPC drivers cease handling the mail once a truck arrives at the airport and the driver opens the doors to the truck. . . . The petitioned-for employees do not even come into contact with the Employer's pilots or other aircraft crew. . . . This work is functionally identical to work that the Employer's sister company, EAF, has performed at the Philadelphia International Airport, and it is also work that, if performed by EAF rather than EWA, would be subject to the Board's jurisdiction. . . . Since the Board has asserted jurisdiction over the work when performed by the Employer's sister company . . . I find that the EWA is subject to the Board's jurisdiction. [Footnotes omitted.]

VI. DISCUSSION

The NMB has asserted jurisdiction over EWA in a representation case involving Flight Deck Crew Members. Emery Worldwide Airlines, 24 NMB 409 (1997); Emery Worldwide Airlines, 23 NMB 168 (1996). Thus, the NMB has found that EWA's airline operations are subject to RLA jurisdiction. The question presented here is whether the employees working at EWA's PMPCs are covered by the RLA given the unique organizational relationship the PMPC operations have to the airline operations. For the reasons set forth below, the NMB finds that the PMPC operations are not covered by the RLA.

A. Applicable Legal Standard

Under 45 U.S.C. § 151, First, the term "carrier" includes

"any company which is directly or indirectly owned or controlled by or under common control with any carrier . . . and which operates any equipment or facilities or performs any service (other than trucking service) in connection with the transportation, receipt, delivery, elevation, transfer in transit . . . and handling of property transported by railroad . . . ." This language was originally applied only to railroads. Section 181, 45 U.S.C., extended this provision to "carriers by air and their employees."

Section 181 provides:

All of the provisions of subchapter I of this chapter except section 153 of this title are extended to and shall cover every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the United States Government, and every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service. [45 U.S.C. § 181, emphasis supplied.]

In Federal Express Corp., 23 NMB 32 (1995), the NMB addressed the meaning of the language in § 181 about persons performing work for a carrier. The NMB had exercised jurisdiction over Federal Express many times, dating back to 1978. In Federal Express, the United Auto Workers (UAW) argued that the employees, including tractor-trailer drivers, it was seeking to represent were subject to the NLRA. The UAW stated that these employees did no airline work and were not "integral to Federal Express' air transportation functions." Id. at 33.

In finding that the RLA covered the disputed group of Federal Express employees, the NMB stated:

Since there is no dispute over whether Federal Express is a common carrier by air, the Board focuses on whether the employees sought by the UAW's petition before the NLRB are subject to the [RLA]. The Act's definition of an employee of an air carrier includes, 'every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner or rendition of his service.' The [RLA] does not limit its coverage to air carrier employees who fly or maintain aircraft. Rather, its coverage extends to virtually all employees engaged in performing a service for the carrier so that the carrier may transport freight.

[Id. at 71. footnote omitted.]

The NMB noted that the tractor-trailer drivers and others were directly employed by Federal Express and supervised by Federal Express employees. Having found Federal Express was a common carrier by air, the NMB stated:

[It] need not consider the relationship between the work performed by the employees of a common carrier and the air carrier's mission, because Section 181 encompasses 'every pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers . . .8

Id. at 73-4. See also ABX, Air Inc. d/b/a Airborne Express, 25 NMB 274 (1998).

In Federal Express, the Board also stated in reference to Section 181 of the Act that "[t]he limit on Section 181's coverage is that the carrier must have 'continuing authority to supervise and direct the manner and rendition of . . . [an employee's] service.' " In that case, the Board noted that the couriers, tractor- trailer drivers, operations agents, and other employees at issue were part of the Federal Express air express delivery system, and were supervised by Federal Express employees. Id. at 73.

B. Application to this Case

Applying Section 181 to the current facts, the Board concludes that EWA (operating as a carrier) does not have the authority to "supervise and direct" the PMPC employees to bring this operation and this group of employees under the RLA. The Board finds that 1) the PMPCs operate out of a separate location; 2) the PMPCs have separate managements and operations; and 3) the PMPC employees do not interact with other EWA employees, indeed they do not even load and unload the aircraft. In fact, the record in this case demonstrates that the PMPC operations operate more separately from the airline operation than the operations at Emery Air Freight. In sum, there is no pervasive evidence that these "employees" are part of the EWA airline operation. In this respect, this case is distinguishable from Federal Express where the NMB noted that the employees at issue were part of the Federal Express air express delivery system, and supervised by Federal Express employees.

While the Carrier argues that to subject it to two statutory schemes could create havoc, the Board notes it is practically no more dangerous than having EWA subject to the RLA, while EAFC is subject to the NLRA. The Board examines each case on the facts presented. The facts in this case lead the Board to conclude that the operations of the PMPCs are not subject to RLA jurisdiction.

VII. CONCLUSION

Based upon the facts and evidence presented, the NMB concludes that Emery Worldwide Airlines' PMPC operations are not covered by the Railway Labor Act. This opinion may be cited as Emery Worldwide Airlines, Inc., 28 NMB 216 (2001).

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

Copies to:

Harry A. Rissetto, Esq.

Sheldon M. Kline, Esq.

Bernard P. Jeweler, Esq.

Mark M. Stubley, Esq.

Marshall Babson, Esq.

Lewis T. Smoak, Esq.

Robert C. Cohen, Esq.

Mr. Ray Benning

Roland P. Wilder, Esq.

Mr. Patrick J. Szymanski