28 NMB No. 84

July 27, 2001

Richard A. Siegel, Esq.

Associate General Counsel

National Labor Relations Board

1099 14th Street, NW

Washington, DC 20570-0001

Re:	NMB File No. CJ-6720
NLRB Cases 20-CA-30013-1 & 2

20-CA-30030-1 & 2

20-CA-11463-1

Aeroground, Inc.

Dear Mr. Siegel:

This responds to your May 7, 2001, request for the National Mediation Board's (NMB) opinion regarding whether Aeroground, Inc. (Aeroground) 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 Aeroground and its employees are subject to the RLA.

I. PROCEDURAL BACKGROUND

This case arose as a result of unfair labor practice charges filed by the San Francisco Airport Organizing Project, a coalition of six labor organizations - including the International Brotherhood of Teamsters, Local 85 (Local 85 or Organization) with the National Labor Relations Board (NLRB) against Aeroground in March, 2001. Local 85 seeks to represent a bargaining unit of warehouse workers, customer service agents, truck drivers, and clerical workers employed by Aeroground at the San Francisco International Airport (SFO).

During the NLRB investigation, Aeroground asserted that it was subject to RLA jurisdiction. The Organization took the position that Aeroground was subject to the National Labor Relations Act (NLRA).

The NMB's opinion in this case is based on the request and record provided by the NLRB, position statements submitted at the NMB's request by Aeroground and the Organization on June 5, 2001, and contracts from Aeroground requested by the NMB.

II. CONTENTIONS OF THE ORGANIZATION

The contentions of Local 85 are as follows:

Aeroground is not subject to the RLA. Aeroground is a freight forwarding and trucking company with warehouses at several airports. Any cargo handling duties performed by Aeroground are incidental to its warehousing and trucking operations. Aeroground employees do not load or unload aircraft. Therefore, Aeroground employees do not provide services traditionally performed by air carrier employees.

Even if the NMB finds that Aeroground employees perform work traditionally performed by air carrier employees, Aeroground is not directly or indirectly controlled by a carrier. Carriers contracting with Aeroground are not involved in Aeroground's day-to-day operations. While some carrier representatives have offices in Aeroground warehouses, these offices are separate from Aeroground's operations and the carrier employees only check labels on cargo or get weights from cargo labels once or twice a day. Carrier representatives do not direct warehouse work.

Carriers do not direct, supervise, or control the manner in which Aeroground does business. Aeroground managers have total discretion over who is hired, fired, disciplined, and reassigned. If there is a problem, carrier representatives speak to Aeroground managers rather than talking to Aeroground employees directly. Aeroground conducts its own training using Aeroground training manuals. Carrier officials do not participate in the training of Aeroground employees.

III. CONTENTIONS OF AEROGROUND

The contentions of Aeroground are as follows:

Aeroground provides cargo handling services for Air China, Air France, Air Swiss, ANA, Asiana Airlines (Asiana), British Airways, Cargolux, EVA Air, Nippon Cargo Airlines (NCA), Singapore Airlines, and US Airways at SFO. These services include receiving and discharging cargo; preparing cargo documentation; preparing cargo for shipping; and loading and unloading cargo.

Cargo handling is a function traditionally performed by air carrier employees and there is substantial evidence of carrier control.

There are two signs outside the facility, one for Air France and the other for Asiana Airlines. The warehouse has similar signs.

Aeroground employees meet with both Air France and Asiana Airlines representatives daily to review their activities. Air France and Asiana Airlines both meet with Aeroground executives monthly to discuss performance.

Specifically, Aeroground argues that its services are directed in detail by each carrier. Aeroground employees work with carrier employees and answer the telephone in the Carrier's names. The Carriers own or control the telephones, computers and all of the software used by Aeroground employees. In addition, Aeroground employees are trained by the Carriers. Aeroground employees are subject to discipline and dismissal based on requests from Carrier officials. Finally, the Carriers control Aeroground's operations on a day-to-day basis. Based on these facts, Aeroground argues, it is subject to RLA jurisdiction.

IV. DISCUSSION

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 RLA. 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).

Aeroground does not fly aircraft and is not directly or indirectly owned by an air carrier. Therefore, to determine if Aeroground 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. Aeroground's Employees Perform Work

Traditionally Performed by Employees of Air Carriers

Aeroground provides cargo handling services to international air carriers at SFO. Another company, Evergreen Aviation Ground Logistics Enterprises (Evergreen), loads and unloads the cargo on the carriers' airplanes.

Aeroground employees operate tugs that transport the cargo from the airplane to a bypass platform. At the bypass platform, Aeroground employees load the cargo onto trucks which transport the cargo to a warehouse facility where Aeroground employees break down the cargo pallets and prepare the cargo for the customers. Aeroground's employees also build pallets for incoming cargo that is transported by Aeroground's employees on trucks and tugs to the airplanes for loading by Evergreen employees. It is well established that cargo handling is work traditionally performed by air carrier employees. North American Aviation Service, PHL, Inc., 28 NMB 155 (2000); 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 Aeroground employees perform functions traditionally performed by air carrier employees.

C. Air Carriers Exercise Substantial Control Over Aeroground

In examining control, the NMB focuses on, inter alia, the Carriers' role in the entity's daily operations, and the entity's employees' performance of services for the carriers. LSG Sky Chefs, Inc., 27 NMB 55 (1999); Sky Valet, Commercial Aviation Services of Boston, Inc. and C and H Air Corporation, 22 NMB 230 (1995). The NMB also examines the carriers' role in employing and terminating employees, the degree to which the carriers supervise the entity's employees, the degree to which the employees are held out to the public as carrier employees, and the degree of carrier control over employees' training. SAPADO I (Dobbs International Services, Inc.), 18 NMB 525, 530 (1991).

Aeroground's clients at SFO include Air China, Air France, Air Swiss, ANA, Asiana, British Airways, Cargolux, EVA Air, NCA, Singapore Airlines, and US Airways. Aeroground has handling agreements with each of these carriers. The agreements incorporate the standards established by the International Air Transportation Association (IATA). Under the IATA Agreement, Aeroground must provide office space for carrier representatives; Aeroground acts as an agent of each carrier; and Aeroground must follow specific guidelines when processing cargo. The IATA Agreement also provides that carriers have the right to supervise Aeroground employees.

In addition to the IATA Agreement, Aeroground executed an Annex B contract (Annex B) with Air France and Asiana. Under Annex B, Air France sets the billing requirements and the employees' hourly wage. Aeroground must also "meet the quality standards indicated in the TASKS MANUAL FOR AIR FRANCE CARGO GHA IN SFO." Annex B also requires Aeroground to "assign an experienced supervisor to coordinate all daily handling activities for the Carrier. The appropriate number of customer service agents and warehouse staff will be assigned to ensure the carrier's service standards are met, as described in the TASKS MANUAL FOR AIR FRANCE CARGO GHA IN SFO."

Under Annex B, Asiana sets the billing requirements and provides all communication equipment. Asiana also determines the employees' hourly wage. In addition, Aeroground is required to hire a minimum of two Korean speaking employees.

Under the agreement with US Airways, Aeroground employees must dress in clothing agreed to by the Carrier. In addition, US Airways requires that the telephone must be answered within four rings.

British Airways requires that Aeroground maintain employment records for review, audit, and inspection by the Carrier. According to the agreement, British Airways will provide all necessary training using only British Airways personnel as trainers. Any additional training must be approved by the Carrier. British Airways conducts station audits and reviews Aeroground's Executive Management Team quarterly.

Steven Ballard is Vice President of Operations for Aeroground. According to Ballard's declaration, submitted to the NLRB, and pursuant to agreements with Air China, Swiss Air, EVA Airways, ANA, NCA, Singapore Airlines, and US Airways, Aeroground employees must:

a) use carrier supplied computers and software as well as handwritten forms, to process incoming and outgoing cargo;

b) answer the telephones in the name of the carrier being served;

c) handle cargo according to the carrier's manuals; and

d) participate in training regarding the carrier's computer systems and cargo handling procedures.

In addition, signs outside each operations facility identify the carrier(s) being served at the location. Singapore Airlines, ANA, NCA and US Airways own or lease the buildings where Aeroground works. Singapore Airlines, NCA and US Airways determine staffing levels, as well as the specific hours that must be worked.

Ballard also states that five employees were either demoted or terminated at Air France's request. According to Ballard, Air China, Swiss Air, EVA Airways, ANA, NCA, Singapore Airlines, and US Airways also have the authority to "effectively demote or terminate Aeroground employees." Ballard states that these carriers also have the authority to request certain Aeroground employees be assigned to their accounts.

Several Aeroground Managers recounted instances in which employees were hired, counseled, suspended, transferred, removed, and terminated based on carrier requests.

While the degree of control exercised over Aerogound varies from carrier to carrier, the record establishes that the Carriers exercise substantial control over Aeroground and its employees.

V. CONCLUSION

Based on the record in this case, and for the reasons discussed herein, the NMB's opinion is that Aeroground's operations and employees at SFO are subject to the RLA. This decision may be cited as Aeroground, Inc., 28 NMB 510 (2001).

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

Copies to:

Sally D. Garr, Esq.

William Gaus, Esq.

Mr. Ray Benning

Roland Wilder, Esq.

Andrew H. Baker, Esq.