UNITED STATES v. SILK, DOING BUSINESS AS ALBERT SILK COAL CO. NO. 312. CERTIORARI TO THE CIRCUIT COURT OF APPEALS Argued March 10, 1947.-Decided June 16, 1947. 1. In determining whether particular workers are independent contractors or "employees" within the meaning of the Social Security Act, the same rules are applicable as were applied by this Court to the National Labor Relations Act in Labor Board v. Hearst Publications, 322 U. S. 111. Pp. 713-714. 2. Unloaders of coal who provide their own tools, work only when they wish to work and are paid an agreed price per ton to unload coal from railroad cars, held, in the circumstances of this case, to be "employees" within the meaning of the Social Security Act. Pp. 706, 716-718. 3. Truck drivers who own their own trucks, pay the expenses of their operation, employ and pay their own helpers and receive compensation on a piece-work or percentage basis, held, in the circumstances of these cases, to be independent contractors and not "employees" within the meaning of the Social Security Act. Pp. 706710, 718-719. 155 F. 2d 356, affirmed in part and reversed in part. 156 F.2d 412, affirmed. No. 312. The District Court granted respondents a judgment for a refund of social security taxes. The Circuit Court of Appeals affirmed. 155 F. 2d 356. This Court granted certiorari. 329 U. S. 702. Affirmed in part and reversed in part, p. 719. No. 673. The District Court granted respondent a judgment for a refund of social security taxes. The Circuit Court of Appeals affirmed. 156 F. 2d 412. This Court granted certiorari. 329 U. S. 709. Affirmed, p. 719. *Together with No. 673, Harrison, Collector of Internal Revenue, v. Greyvan Lines, Inc., on certiorari to the Circuit Court of Appeals for the Seventh Circuit, argued March 10, 11, 1947. Robert L. Stern argued the cause for petitioners. With him on the briefs were Acting Solicitor General Washington, Sewall Key and Lyle M. Turner. Jack B. Tate was also with them on the brief in No. 312. Ralph F. Glenn argued the cause for respondent in No. 312. With him on the brief were Robert Stone and Warren W. Shaw. Wilbur E. Benoy argued the cause for respondent in No. 673. With him on the brief were Arthur M. Sebastian and Robert Driscoll. MR. JUSTICE REED delivered the opinion of the Court. We consider together the above two cases. Both involve suits to recover sums exacted from businesses by the Commissioner of Internal Revenue as employment taxes on employers under the Social Security Act.' In both instances the taxes were collected on assessments made administratively by the Commissioner because he concluded the persons here involved were employees of the taxpayers. Both cases turn on a determination as to whether the workers involved were employees under that Act or whether they were independent contractors. Writs of certiorari were granted, 329 U. S. 702 and 329 U. S. 709, because of the general importance in the collection of social security taxes of deciding what are the applicable standards for the determination of employees under the Act. Varying standards have been applied in the federal courts.2 1 Titles VIII and IX, Social Security Act, 49 Stat. 636 and 639, as repealed in part 53 Stat. 1. See Internal Revenue Code, chap. 9, subchap. A and C. 2 Texas Co. v. Higgins, 118 F. 2d 636; Jones v. Goodson, 121 F. 2d 176; Deecy Products Co. v. Welch, 124 F. 2d 592; American Oil Co. v. Fly, 135 F. 2d 491; Glenn v. Beard, 141 F. 2d 376; Magruder v. Yellow Opinion of the Court. 331 U.S. Respondent in No. 312, Albert Silk, doing business as the Albert Silk Coal Co., sued the United States, petitioner, to recover taxes alleged to have been illegally assessed and collected from respondent for the years 1936 through 1939 under the Social Security Act. The taxes were levied on respondent as an employer of certain workmen some of whom were engaged in unloading railway coal cars and the others in making retail deliveries of coal by truck. Respondent sells coal at retail in the city of Topeka, Kansas. His coalyard consists of two buildings, one for an office and the other a gathering place for workers, railroad tracks upon which carloads of coal are delivered by the railroad, and bins for the different types of coal. Respondent pays those who work as unloaders an agreed price per ton to unload coal from the railroad cars. These men come to the yard when and as they please and are assigned a car to unload and a place to put the coal. They furnish their own tools, work when they wish and work for others at will. One of these unloaders testified that he worked as regularly "as a man has to when he has to eat" but there was also testimony that some of the unloaders were floaters who came to the yard only intermittently. Respondent owns no trucks himself but contracts with workers who own their own trucks to deliver coal at a uniform price per ton. This is paid to the trucker by the respondent out of the price he receives for the coal from the customer. When an order for coal is taken in the company office, a bell is rung which rings in the building used by the truckers. The truckers have voluntarily Cab Co., 141 F. 2d 324; United States v. Mutual Trucking Co., 141 F. 2d 655; Glenn v. Standard Oil Co., 148 F. 2d 51, 53; McGowan v. Lazeroff, 148 F. 2d 512; United States v. Wholesale Oil Co., 154 F.2d 745; United States v. Vogue, Inc., 145 F. 2d 609, 612; United States v. Aberdeen Aerie No. 24, 148 F. 2d 655, 658; Grace v. Magruder, 148 F.2d 679, 680-81; Nevins, Inc. v. Rothensies, 151 F. 2d 189. adopted a call list upon which their names come up in turn, and the top man on the list has an opportunity to deliver the coal ordered. The truckers are not instructed how to do their jobs, but are merely given a ticket telling them where the coal is to be delivered and whether the charge is to be collected or not. Any damage caused by them is paid for by the company. The District Court found that the truckers could and often did refuse to make a delivery without penalty. Further, the court found that the truckers may come and go as they please and frequently did leave the premises without permission. They may and did haul for others when they pleased. They pay all the expenses of operating their trucks, and furnish extra help necessary to the delivery of the coal and all equipment except the yard storage bins. No record is kept of their time. They are paid after each trip, at the end of the day or at the end of the week, as they request. The Collector ruled that the unloaders and truckers were employees of the respondent during the years 1936 through 1939 within the meaning of the Social Security Act and he accordingly assessed additional taxes under Titles VIII and IX of the Social Security Act and Subchapters A and C of Chapter 9 of the Internal Revenue Code. Respondent filed a claim for a refund which was denied. He then brought this action. Both the District Court and the Circuit Court of Appeals thought that the truckers and unloaders were independent contractors and allowed the recovery. 3 Respondent in No. 673, Greyvan Lines, Inc., a common carrier by motor truck, sued the petitioner, a Collector of Internal Revenue, to recover employment taxes alleged to have been illegally assessed and collected from it under similar provisions of the Social Security Act involved in 3 155 F.2d 356. Silk's case for the years or parts of years 1937 through the first quarter of 1942. From a holding for the respondent in the District Court petitioner appealed. The Circuit Court of Appeals affirmed. The chief question in this case is whether truckmen who perform the actual service of carrying the goods shipped by the public are employees of the respondent. Both the District Court and the Circuit Court of Appeals thought that the truckmen were independent contractors. 4 The respondent operates its trucking business under a permit issued by the Interstate Commerce Commission under the "grandfather clause" of the Motor Carrier Act. 32 M. C. C. 719, 723. It operates throughout thirty-eight states and parts of Canada, carrying largely household furniture. While its principal office is in Chicago, it maintains agencies to solicit business in many of the larger cities of the areas it serves, from which it contracts to move goods. As early as 1930, before the passage of the Social Security Act, the respondent adopted the system of relations with the truckmen here concerned, which gives rise to the present issue. The system was based on contracts with the truckmen under which the truckmen were required to haul exclusively for the respondent and to furnish their own trucks and all equipment and labor necessary to pick up, handle and deliver shipments, to pay all expenses of operation, to furnish all fire, theft, and collision insurance which the respondent might specify, to pay for all loss or damage to shipments and to indemnify the company for any loss caused it by the acts of the truckmen, their servants and employees, to paint the designation "Greyvan Lines" on their trucks, to collect all money due the company from shippers or consignees, and to turn in such moneys at the office to which they report after delivering a shipment, to post bonds with the 4 156 F. 2d 412. |