Baker Bus Service v. Edward W. Keith et al., 416 A.2d 727 (Me. 1980), 
affirming CV-78-702 and Board Case No. 78-A-05.

MAINE SUPREME JUDICIAL COURT              Reporter of Decisions
                                          Decision No. 2371
                                          Law Docket No. Ken-80-5
                     BAKER BUS SERVICE, INC.
                     EDWARD W. KEITH et al.
                      Argued  June 3, 1980
                      Decided July 14, 1980
          Plaintiff Baker Bus Service, Inc., appeals from the
judgment of the Superior Court, Kennebec County, affirming the
decision of the Maine Labor Relations Board (the "Board") that
plaintiff in its operation under contract of the City of Augusta's
school buses was a "public employer," as defined by 26 M.R.S.A.
 962(7) (Supp. l979),[fn]1 subject to the Board's jurisdiction.
Plaintiff asserts that under the statute a private corporation
can never be a "public employer," and that even if it could, the
facts of this case fail, as a matter of law, to establish that it
is a "public employer."
          We disagree and accordingly deny the appeal.
          On August 19, 1977, the Augusta Board of Education
(the "City"), which had in the past operated its own school bus
1  Section 962(7) provides:
          7.  Public employer.  "Public employer" means any of-
     ficer, board, commission, council. committee or other person
     or body acting on behalf of any municipality or town or any
     subdivision thereof, or of any school, water, sewer or other
     district, or the Maine Turnpike Authority.


system and was on that date involved in collective bargaining with
the recognized bargaining agent for Augusta's bus drivers, defend-
ant Teamsters Local Union No. 48, contracted its school bus oper-
ation to plaintiff Baker Bus, a private Maine corporation.  There-
after, the union began an organizational campaign among plaintiff's
bus drivers who drove the Augusta school buses.  On October 5,
1977, the National Labor Relations Board refused to take jurisdic-
tion over any matters involving plaintiff, on the ground that the
NLRB consistently refuses to assert jurisdiction over essentially
local school transportation operations.  On December 28, 1977,
the union filed a petition with the Maine Labor Relations Board
for appropriate unit determination and a bargaining agent elec-
tion pursuant to 26 M.R.S.A.  966.  At the outset of the hearing
on the petition held before a Board hearing examiner on February
22, 1978, plaintiff moved to dismiss the petition on the ground
that it was not a "public employer" subject to the Board's juris-
diction.  After taking evidence on this issue the examiner issued
his report, concluding that the Board did have jurisdiction be-
cause plaintiff in its Augusta school bus operations was a "pub-
lic employer" as defined in section 962(7).
          Plaintiff appealed to the Board, which in July, 1978,
conducted a hearing of its own.  On October 6, 1978, the Board
affirmed the examiner's decision, ruling that plaintiff was a
"public employer" "to the extent that it operates the school bus
system" for the City.  Plaintiff's appeal to the Superior Court
was denied, and its timely appeal to this court ensued.


          The Superior Court addressed itself to the unresolved
question of what standard should be employed when reviewing the
findings of fact made by the Maine Labor Relations Board in a
unit determination proceeding.  26 M.R.S.A.  968(4) provides
that Board review of a unit determination decision "shall be
subject to review by the Superior Court in the manner specified
in section 972."  Section 972, relating by its terms to review of
arbitration decisions, provides:
      972. Review
          Either party may seek a review by the Superior Court
     of a binding determination by an arbitration panel.  Such
     review shall be sought in accordance with the Rules of
     Civil Procedure, Rule 80B.
          The binding determination of an arbitration panel or
     arbitrator, in the absence of fraud, upon all questions
     of fact shall be final.  The court may, after considera-
     tion, affirm, reverse or modify any such binding determin-
     ation or decision based upon an erroneous ruling or find-
     ing of law.  An appeal may be taken to the law court as in
     any civil action.
The Superior Court, rather than applying the standard of "final
in the absence of fraud," concluded that the Board's findings
are final "only if they are supported by any credible evidence."
Applying that standard to review the factfindings of the Board in
this case, the court held that all the Board's findings were sup-
ported by credible evidence and therefore were binding on the
          Although we agree with the Superior Court that the
Board's findings were sufficiently supported by the evidence,
we disagree with the court's construction of sections 968 and

972.  In Sanford Highway Unit of Local 481, AFSCME v. Town of
Sanford, Me., 411 A.2d 1010, 1013 (1980), we said, in dictum,
that "26 M.R.S.A.  968(4), by reference to  972, makes the
Board's findings of fact final 'in the absence of fraud'."  Sec-
tion 968(4) states that Board decisions in unit determination
cases shall be reviewed in the manner outlined by section 972,
and that "manner" includes an "absence of fraud" standard of re-
view for findings of fact.  Our construction is supported by an
examination of section 968(5)(F) relating to appeals in prohib-
ited practice cases, wherein the Board's findings are expressly
declared to be "final unless shown to be clearly erroneous."  The
sharp difference in language used in successive subsections (4)
and (5) of 26 M.R.S.A.  968 strongly indicates that the legisla-
ture truly meant the Board's findings of fact in unit determina-
tion proceedings to be accorded more finality on review than its
findings in prohibited practices cases.  We thus conclude that in
a unit determination proceeding, the Board's findings of fact are
final in the absence of fraud.
          In the case at bar, there has never been the slightest
suggestion of fraud.  Therefore, we must regard the Board's find-
ings of fact as final.  In any event, the Superior Court's appli-
cation of the stricter standard of "clearly erroneous" could in
no way harm plaintiff.
          We also reject plaintiff's contention that reference
to M.R.Civ.P. 80B in section 968(4) requires a standard of re-
view that findings of fact will not be disturbed only if they

are supported by "substantial evidence."  Rule 80B does not it-
self provide a standard of review; it merely prescribes the pro-
cedure by which the Superior Court reviews governmental action.
For example, under section 968(5)(F), while review of the Board's
prohibited practices decision is to be "in accordance with" Rule
80B, the standard of review is separately stated as the "clearly
erroneous" rule.  The Administrative Procedure Act, 5 M.R.S.A.
 8001 et seq. (1979), similarly provides a distinct standard of
review, that of "substantial evidence on the whole record."  5
M.R.S.A.  11007(4)(C)(5).  Thus, the reference in section 968(4)
to Rule 80B imports no standard of review contrary to that ex-
pressly provided by the statute's language--final in the absence
of fraud.  This court's opinion in Frank v. Assessors of Skowhe-
gan, Me., 329 A.2d 167, 170 (1974), should not be read to say
anything to the contrary.

          Plaintiff's contention that a private corporation can-
not be a "public employer" is also without merit.  Section 962
(7) provides that a "public employer," for purposes of the Munic-
ipal Public Employees Labor Relations Law ("the Act") (26 M.R.
S.A. ch. 9-A), includes "any officer, board, commission, council,
committee or other persons or body acting on behalf of any munic-
ipality or town . . . or of any school . . . district."  (Emphasis
added)  The Act defines "person" as "an individual, corporation,

partnership, company or association," 26 M.R.S.A.  1.  It is
thus evident that a "public employer" can be a private corpor-
ation, such as plaintiff, if it acts on behalf of a municipality.
          The phrase "acting on behalf of" used by Maine to de-
fine the sweep of the term "public employer" is apparently sui
generis in public labor relations law.  By including within the
definition of "public employer" a corporation, as well as natural
persons, who "act on behalf of" a municipality, section 962(7)
invokes the general principles of agency, which are defined in
the identical terms of "acting on behalf of."  See Desfosses v.
Notis, Me., 333 A.2d 83, 86 (l975), quoting Restatement (Second)
of Agency 1(1) (1958).  However, as the Board with the affirm-
ance of the Superior Court properly recognized, the Act's pur-
poses do not require that every agent of a municipality be treat-
ed as a "public employer" subject to the Act.  By the established
law of agency, some agents are independent contractors, while
there are other agents who, if natural persons, are in contrast
designated as "servants."  The distinction between an agent-
servant and an agent-independent contractor is whether the
agent's performance with respect to his physical conduct is sub-
ject to another's control or right to control.  In determining
whether Baker Bus was a "public employer" under the Act, the tri-
bunals below, in effect, applied that traditional test.[fn]2
2  The Board and the Superior Court erred by stating the test as
being whether plaintiff was an independent contractor or an "agent."
The terms "agent" and "independent contractor" are not mutually
exclusive; one may be both an agent and an independent contractor.
See Restatement (Second) of Agency  14N (1958); Columbia Broad-
          By expanding the definition of "public employer" be-
yond the municipality itself, the clear legislative intendment
was to insure that employees, such as the school bus drivers in
this case, would not be denied the benefits and protections guar-
anteed by the Act when the municipality contracted its operations
to a nominally separate, private business entity that actually
was, for all practical purposes, the alter ego of the municipal-
ity.  In order to effectuate the purpose of the Act,[fn]3 the Board,
in determining the rights of employees, must treat a municipal-
ity's "servant" or alter ego the same as the municipality itself.
We must therefore determine whether Baker Bus, in providing school
bus operations for the city of Augusta, acted as a "servant" sub-
ject to the City's control or right to control.

casting System, Inc. v. Stokely-Van Camp, Inc., 522 F.2d 369, 375
(2d Cir. 1975).  As defined in the Restatement (Second) of Agency
      2.  Master; Servant; Independent Contractor
          . . . .
          (2)  A servant is an agent employed by a master to
     perform service in his affairs whose physical conduct in
     the performance of the service is controlled or is subject
     to the right to control by the master.
          (3)  An independent contractor is a person who con-
     tracts with another to do something for him but who is not
     controlled by the other nor subject to the other's right
     to control with respect to his physical conduct in the per-
     formance of the undertaking.  He may or may not be an agent.
(Emphasis added)
3  See generally 26 M.R.S.A.  961 (1974), which provides:
          It is declared to be the public policy of this State
     and it is the purpose of this chapter to promote the im-
     provement of the relationship between public employers and
     their employees by providing a uniform basis for recogniz-
     ing the right of public employees to join labor organiza-
     tions of their own choosing and to be represented by such
     organizations in collective bargaining for terms and condi-
     tions of employment.

          Upon review of the record we cannot say, as a matter of
law, that the Board was incorrect when it concluded that there
were sufficient elements of control present such that plaintiff,
if a natural person, would have been the City's "servant" and,
consequently, within the category of "public employer."  The con-
tract under which plaintiff operated the Augusta school buses pro-
vided, in pertinent part, that for a token fee plaintiff would
lease all necessary school buses from the City and would use the
leased buses exclusively in its service to the City; on the sides
of the school buses were to be printed the words "City of Augus-
ta School Department"; except in maintaining the buses, which
was plaintiff's duty, the City was responsible for complying with
governmental safety regulations, as well as for furnishing addi-
tional and replacement buses, installing radios, and providing
comprehensive, collision, and liability insurance coverage; the
City supplied all gasoline required, reimbursed plaintiff for any
registration and excise taxes paid, and provided a parking lot
for storage of the buses; and the City retained the right to mod-
ify, combine, or eliminate bus routes, and to veto the hiring of
any driver.[fn]4
          Plaintiff thus was not required to furnish any of the
necessary equipment, supplies, or materials when it agreed to
operate the school bus system for Augusta.  Nor was plaintiff
4  The finding of a veto power was the Board's only factual de-
termination disputed by plaintiff.  However, its president tes-
tified before the Board to this very fact.  Even if the veto pow-
er over hiring were not present, we would not reach any different

required to make more than a minimal capital investement.  The
City's retained powers over routes and the hiring of personnel
establishes that plaintiff could exercise little independent
judgment in carrying out the contract.  On the record before us,
the Board and the Superior Court were not incorrect in concluding
that plaintiff, in performing its contract to operate the Augusta
school buses, was acting on behalf of the City and under its con-
trol to an extent that rendered it a "public employer" for pur-
poses of the Act.[fn]5
          The entry is:          
                              Appeal denied.
                              Judgment affirmed.
5  We reject, as did the Superior Court, plaintiff's contention
that the Board had previously decided, in a prohibited practices
case involving the union and the Augusta Board of Education, that
Baker Bus was not "acting on behalf of" the City.  That prior
litigation concerned only the question of whether the Board of
Education's contract with Baker Bus constituted a violation of
its duty to bargain with the union in good faith, 26 M.R.S.A. 
964, 965 (1974).  The issue of Baker Bus's status as a "public
employer" was neither litigated by the parties nor decided by the
Board in resolving the union's prohibited practices complaint.
All concurring.